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The Unemployment Debate Rages On

June 15, 2010 - by Donny Shaw

Earlier this morning I passed along word of what appeared to be an emerging deal to take a little bit of unemployment insurance money out of the tax extenders bill in order to solidify the Democrats’ center-right flank and and pass it by the end of the week. But as the day progresses, that report looks more and more premature. This PM update from CongressDaily, which I’ll extract a good chunk of because it’s behind a paywall and because I know a lot of folk are watching this closely, illustrates the morass of competing concerns the Senate is still slogging through:

The Senate could take test votes as early as today on dueling “extenders” packages put forward by each party. But with neither expected to get the necessary 60 votes, Senate Finance Chairman Max Baucus is preparing a scaled-back alternative that could include lower spending on unemployment benefits and Medicare physician payments.

Refinements could include jettisoning an extra $25 a week added to unemployment checks, saving $6 billion, and shortening the “doc fix” to as little as seven months, saving another $16 billion, sources said.

Those fixes would get the cost down close to the House-passed version, which would add $54 billion to the deficit, as wavering senators on both sides of the aisle expressed continued concern about the $79 billion deficit impact of the Senate Democrats’ proposal.

Sen. Olympia Snowe, R-Maine, said she urged Majority Leader Reid to simply take out the “doc fix” and pay for it with unused stimulus funds.

Sen. Ben Nelson, D-Neb., turned around the argument that deficit spending is necessary to get out of a recession.

“If everything is an emergency, nothing is,” he said. “I think we slow down a recovery when we continue to borrow for deficit spending, even for worthwhile items.” Nelson said he still might consider voting “no” unless the entire package is offset. “I don’t know if paring down is the answer,” he said.

Part of the $79 billion includes $24 billion for state Medicaid funding relief, which most governors are argue is critical to avoid public-sector layoffs, because money to pay teachers, firefighters and others would otherwise have to compete with medical care for those without insurance.

[…]

In contrast to the Senate Democratic proposal, the proposal from Republican Policy Committee Chairman John Thune of South Dakota would trim $68 billion from the deficit based on CBO estimates released today. A previous estimate did not account for $13 billion in added tax revenues projected due to medical liability changes, as reduced health spending would result in more taxable wages, rather than nontaxed employer-provided health insurance.

The Senate is debating all this right now. Currently, Sen. John Barrasso [R, WY] has the floor and is discussing his amendment to the Native American land settlement provision in the bill, so clearly there is more playing into all this than even the article above describes. Votes, apparently, will be taking place later in the day. Remember, the Democrats need all 59 of their members voting in favor, plus at least one Republican cross-over to get the 60 voted needed to break the Republicans’ filibuster.

You can get more info on the Sen. John Thune [R, SD] alternative via a press release posted on his website, the CBO (pdf), or Thomas. On Thomas, you’ll note that among the co-sponsors of the Thune alternative is one of the few Republicans Democrats are considering gettable cross-over votes for passing their own version, Sen. Scott Brown [R, MA]

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