House repeals law withholding contractors’ taxes

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In a rare show of unity in a bitterly partisan year, the House has voted overwhelmingly to repeal a law requiring federal, state and local governments to withhold 3 percent of what contractors are owed until they pay their taxes.

Federal investigators have found tens of thousands of contractors who owe billions of dollars to the U.S. government. The 5-year-old statute was designed to force scofflaws who perform government work to pay up.

But that urge has been overcome by a more pressing worry — trying to create and preserve jobs. The withholding requirement doesn’t take effect until January 2013, meaning that scrapping it won’t produce any new jobs. But members of both parties said repealing the law would remove impediments to future job creation.

The vote was 405-16.