By John Shaw

WASHINGTON (MNI) - As the Senate gears up for a long and acrimonious battle over health care reform, House Democratic leaders have decided to spend the next several weeks working on a bill to create jobs.

Senate Majority Leader Harry Reid is scheduled to meet with his caucus this evening to outline the main elements of his health care plan and to show cost estimates provided by the Congressional Budget Office.

Reid has been working for weeks to merge the health care reform bills passed by the Senate Health, Education and Labor Committee and the Senate Finance Committee into one package.

He sent several policy options to the Congressional Budget Office in late October for cost estimates.

The Senate health care could begin as early as this week, when Reid makes a motion to take up the bill.

Senate Republicans are expected to filibuster the motion and it would require 60 votes to end the filibuster and proceed to the bill.

Once the Senate begins debating the bill it will likely take more than a month before a final vote is scheduled -- assuming Reid can muster 60 votes to end the debate and move to final passage.

The Senate is expected to be consumed by the health care debate for the rest of this year, with little work on other items except for possible votes on spending bills and the debt ceiling.

House Democratic leaders passed their health care bill last week and have signalled they will turn their attention to job creation legislation.

"Clearly, 10.2% unemployment is unacceptable and is causing great pain to literally millions of people around the country," House Majority Leader Steny Hoyer said Tuesday.

He added that Democrats want to pass a job creation bill in the House by December 18, the day he hopes Congress will adjourn for the year.

Hoyer said House Democrats are reviewing "a lot of options" to boost job creation, including infrastructure spending, a highway bill, business tax credits for job creation, another extension of unemployment insurance, an adjustment to COBRA and assistance to state governments.

Hoyer said he "would not characterize" the package that is being developed as the second stimulus bill of 2009. Congress passed a $787 billion fiscal stimulus bill in February. The measure, he said, would be "targeted on jobs."

"We're moving ahead at a pace that hopefully will allow us to do something in the next three weeks," he said.

The House Majority Leader said the package will be devised to boost job creation in the short-term, suggesting that any offsets would occur later after the economy picks up speed.

House Democrats have begun to float ideas to pay for at least part of the cost of the jobs bill. Rep. John Larson, chairman of the House Democratic Caucus, has suggested imposing a 0.25% tax on transactions involving various financial products, including unregulated derivatives.

House Financial Services Committee Chairman Barney Frank and House Ways and Means Committee Chairman Charlie Rangel both oppose the idea--making it highly unlikely that it will be seriously considered.

Frank told reporters Tuesday that imposing such a tax in the U.S. would be folly.

"You couldn't even begin to do that unless it was internationally harmonized," Frank said.

Michael Boskin, the former chairman of the CEA in the first Bush administration, is urging Congress to cut payroll taxes.

In an op-ed in Wednesday's Wall Street Journal, Boskin said a reduction in the payroll tax of six percentage points (of the 12.4% Social Security component) could increase employment by three to four million workers.

This, he said, is "an amount equal to all the job losses since the stimulus was passed."

** Market News International Washington Bureau: (202) 371-2121 **

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