On November 10, 2011, the Senate, by a vote of 95 to 0, approved legislation to repeal the three percent withholding on government contracts scheduled to take effect in 2013. The House also passed repeal legislation on October 27, 2011. The Senate bill, however, also includes a new tax credit of up to $5,600 for hiring military veterans unemployed for six months or more, up to $2,400 if unemployed for four weeks or more. The tax credit for hiring disabled veterans was also expanded to up to $9,600.
The $12.8 billion cost of the legislation is paid for by changing the calculation of modified adjusted gross income in determining eligibility for some health care credits and delaying scheduled fee reductions on mortgage applications for loans guaranteed by the Department of Veterans Affairs.
The House and Senate will still be required to reconcile their separate versions of the legislation. The Administration supports the Senate bill.