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Dems Lose Big on Unemployment Insurance/Tax Extenders Vote

June 16, 2010 - by Donny Shaw

After two weeks of solid debate — and two weeks of people having their unemployment insurance cut off because of congressional inaction — the Senate this morning took their first test vote on passing H.R. 4213, the “American Jobs and Closing Tax Loopholes Act of 2010.” They failed miserably. The final vote count was 45-52. Sixty votes were needed to proceed.

The bill would, among other things, extend the filing deadline to November 30, 2010 for people whose unemployment benefits are expiring and are looking to move into the next tier of extended federal benefits. The current deadline took effect on June 2, and has already caused about 400,000 unemployed Americans to see their extended benefits end prematurely.

The bill also contains a handful of tax-credit extensions, dozens of tax cut provisions targeted at specific industries, $24 billion in aid for states struggling to pay for Medicaid, a 19-month delay of a scheduled 21% pay cut for doctors under Medicare, and more, for a total net cost of about $141 billion. Because $78 billion of that isn’t paid for with new revenues, the Senate had to vote on waiving their self-induced pay-as-you-go rule requiring all new spending to be fully offset. This motion on waiving pay-as-you-go is what they voted on today and failed overwhelmingly to pass.

No Republicans voted in favor of the motion, and 11 Democrats broke rank and voted with Republicans against it. Full roll call details can be seen here. We’ll have the roll call info up on OpenCongress soon, but for now you can view it here.

So, what’s the next step?

Carl Hulse reports that the Dems are putting unemployment benefits at the front of the chopping block:

Senate Democrats are exploring whether to eliminate an extra $25 a week in unemployment benefits, part of the economic stimulus legislation passed in 2009, as a way to cut costs and attract Republican votes for a stalled package of tax breaks, tax increases on the affluent and safety-net spending.

Top officials said that change would save billions of dollars over the next six months and could lead to approval of an overall extension of jobless pay by making the legislative package easier to swallow for lawmakers worried about deficit spending.

Among other changes under consideration is blocking a cut in Medicare fees paid to doctors for just one year rather than the 19 months approved last month by the House, which was already a reduction from the three years of relief sought earlier.

Taking out the extra $25 per month would save about $6 billion this year, and shortening the Medicare pay-cut delay would lower the cost of the bill by roughly $8 billion, though this should pretty much be seen as a gimmick because you can be sure that Congress will be back 12 months down the road to extend the patch again as they have been doing consistently since 2003.

Yesterday, the general feeling was that Majority Leader Harry Reid [D, NV] and others believed that taking these items out and getting the bill’s net deficit impact down to $64 billion or so would be enough to round up 60 votes and get this bill out of the Senate. But I think the wide margin of failure in today’s vote may change those calculations. I think there is going to have to be a more thorough reimagining of the legislative package at hand, which, of course, is going to mean more delay and more unemployed people losing their benefits.

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