The House approved a new measure that will eliminate a highly-criticized rule that would require government agencies to withhold 3 percent of payments to government contractors. The provision was included in President Barack Obama’s $450 billion jobs bill and was scheduled to take effect in January. It passed by a vote of 405 to 16.

“Although programs with eligibility based on recipient income (e.g., Medicaid) would be exempt, programs with eligibility based on age (e.g., Medicare) would not be,” reads a statement from the California Medical Association (CMA). “The bill now heads to the U.S. Senate. The Senate must also pass this bill for it to become law.”

Earlier in the week, the White House released an official statement of policy that said the measure “would reduce a burden on government contractors who otherwise comply with their tax obligations, particularly small businesses.”

At that time, White House press secretary Jay Carney said that the current pay-for in the House version is something he’d support.

A second measure that will cover the cost of repealing the rule (just over $11 billion over the next decade) and that will tighten eligibility requirements for Medicare and other health benefit programs also passed yesterday with a vote of 262 to 157. The idea for this bill was taken from Obama’s most recent deficit package.

This means the House has passed a total of 17 jobs bills which are still awaiting action from the Senate, which is primarily Democrat controlled. Republicans are reportedly trying to put pressure on Senate Majority Leader Harry Reid from Nevada to act.

The repeal of the 3 percent withholding rule is the first item in Obama’s jobs bill that has passed in either chamber. In fact, the senate has failed to pass any of several other measures that the president has supported.

“Repealing this tax is an important element of both our Plan for America’s Job Creators and the president’s jobs plan, and the Senate should pass it quickly so the president can sign it into law,” House Speaker John Boehner (R., Ohio) said in a statement. “But Senate Democrats shouldn’t stop there. The House has passed at least 15 jobs bills that are gathering dust over in the Democratic-led Senate.”

“There is unanimous agreement that cuts of this magnitude would result in serious disruptions in care for the nation’s elderly and disabled populations, and cannot be allowed to occur,” reads CMA’s statement. “CMA continues to urge Congress to repeal the SGR once and for all as part of the deficit reduction package currently being worked on by the Joint Select Committee on Deficit Reduction."

How do you feel about the repeal of the 3 percent withholding rule? Tell us in the comments!

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