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Congress Returns to Contentious Votes on Unemployment, Tax Extenders

June 7, 2010 - by Donny Shaw

On May 28, before leaving for recess, the House split the extender bill, known as the American Jobs and Closing Tax Loopholes Act of 2010, into two pieces and passed them both. One piece contained the unemployment extension, several stimulative tax credits and a couple loophole closers that would effectively increase taxes on some businesses. The bill would extend the filing deadline for unemployment benefits until the end of November 2010, at a cost of about $40 billion. This is designed to help long-term unemployed people who have exhausted their state-based benefits and are in tiers 1-3 of the federally funded extension. The bill would not add a fifth tier of benefits, but would extend the filing deadline for people in tiers I (20 weeks), II (14 weeks) and III (13 weeks for states with unemployment rates above 6%) who are looking to move into the next tier of benefits.

The other piece would delay, for 19 months, a 21% payment cut that doctors are scheduled to face under an automatic Medicare payment formula that Congress created in 1997.

By the time the House finished their work on the broken-up bill last week, the Senate had already left town, causing the bill to linger as unfinished business over the week-long recess. As a result, on June 2, unemployment insurance benefits began expiring for hundreds of thousands of people, and the pay cut for doctors is set to take effect imminently (the only reason it hasn’t happened yet is that Medicare has temporarily postponed its claims processing). Senate Majority Leader Harry Reid [D, NV] initially said that passing the bill would be the first thing the Senate does on Monday morning. But, as The Hill is reporting, it now looks like that isn’t going to happen. Senate Democrats have yet to schedule a debate on the bill, and they likely do not have the votes to pass it in its current form.

The problem seems to be that with the midterm elections rapidly approaching, Democrats are getting more and more skittish about voting for anything that would add to the federal deficit, even if it is for the stimulative social programs that they have traditionally believed in. According to the Congressional Budget Office, the extenders bill would add $54 billion to the deficit over the next ten years. At the same time, Democrats are getting pressure from the left to put $8 billion for COBRA health care benefits for the unemployed back in the bill and from state governors around the country to restore $24 billion in aid for cash-strapped states struggling to pay for Medicaid. Theses provision were stripped from the bill in the House in order to lower its top-line cost by $32 billion and win the support of conservative Blue Dog Democrats whose votes were needed for it to pass.

The way forward is unknown at this point. Senate Dems will probably need to modify the bill in order to satisfy potential defectors from the left and the right, and pick up the one Republican vote they will need to break a filibuster. But any changes they make will cause the bill to go back to the House for another round of voting. That could be problematic because the main chunk of the bill — the piece with the unemployment extension — passed the House the first time without a single vote to spare. Still, the House is generally more malleable than the Senate when it comes to rounding up votes for crucial bills, and House Speaker Nancy Pelosi [D, CA-8] is a legend when it comes to whipping. Stay tuned.

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