OBAMA’S JOBS PACKAGE REFRESHES PUSH TO REPEAL WITHHOLDING RULE

House Republicans are using the president’s jobs proposal to reignite a longstanding effort to repeal a pending government rule that would withhold taxes from payments to contractors.

In fact, GOP lawmakers Wednesday said they hoped to find a kindred spirit in President Obama, arguing that such a move is just the thing to get the economy moving again.

“It makes perfect sense for him to support a repeal like this,” said Rep. Joe Walsh (R-Ill.).

GOP lawmakers have lined up a bipartisan group of 235 co-sponsors to a bill that would repeal a rule requiring governments at every level to withhold 3 percent of payments to contractors for tax purposes.

In his jobs package, the president actually wants to delay that requirement, which has already been pushed back to 2013. Republicans want him to go further and scrap it altogether.

A 2009 congressional estimate said that not implementing the 3 percent withholding would essentially keep close to $11 billion out of the Treasury. The Government Accountability Office also released a report this week that found stimulus contractors owed the government hundreds of millions of dollars in taxes.

But critics argue that broad withholding requirement is too blunt a tool to be used in collecting that revenue, and an overreach of government power.

“I think it was for the government … to control people through their money and not through the rule of law,” said Rep. Richard Hanna (R-N.Y.).

Republicans did tip their cap, however, to a related aspect of the president’s jobs push, as he directed federal agencies to cut in half the time they pay out to contractors.

“We think that’s a great idea, and let’s give credit where credit is due,” said Rep. Mick Mulvaney (R-S.C.). “It’s a good thing for the president to do that.”

There is no timeline yet for a vote on the withholding repeal bill, but Rep. Wally Herger (R-Calif.) indicated that the Senate is the major hurdle for its passage.

“They have been the big drawback,” he said.

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