Dems Shrink The Unemployment/Tax Extenders Bill Again, But GOP Still Says NoJune 24, 2010 - by Donny Shaw
After consulting with lobbyists yesterday to see what it would take to win a few Republican votes, Senate Dems are back with their latest revision of the H.R. 4213, the American Jobs and Closing Tax Loopholes Act. Majority Leader Sen. Harry Reid [D, NV] has already filed cloture on the revised bill, and according to the congressional record, “a vote on cloture will occur on Friday, June 25, 2010.”
Cloture is a procedural motion to overcome a filibuster that requires 60 votes to pass. According to reports, the Democrats have been within two votes of passing the cloture motion for several days now. This latest revision is designed to shore up support among Democratic and Republican moderates to win those crucial two votes. At this point, all indications are that it hasn’t worked.
So what has changed in the latest revision?
- Slight softening of the carried-interest tax loophole closer — this revision makes a few “technical corrections” to the provision in the bill to raise taxes on hedge fund managers who for years have been exploiting a loophole in the tax code to pay the lower capital gains rate on their personal income instead of the regular income tax rate. The revisions would cause this provision to bring in about $500 million less in new revenues over the next ten years.
- Phase-out of state Medicaid aid — Like the previous version of the bill, this latest revision would extend for six months a stimulus program providing federal assistance for states that are struggling to pay their Medicaid bills. This version, however, would gradually phase out how much the federal government pays out over those six months, reducing the cost of the provision by $8 billion.
- Elimination of Advanced EITC — People eligible for the earned income credit currently have the option to use a program allowing them to essentially get advances on the credit by having less money withheld from their paychecks throughout the year. The latest revision would end this program, saving $1.2 billion over the next ten years. The savings are the result of eliminating the possibility of errors in how the program is executed.
- $11.29 billion in reallocations — Lots of money moved from other programs to pay for the spending items in H.R. 4213. Here’s what the summary from the Finance Committee says is being reallocated: “These reallocations consist of $600 million in unobligated Recovery Act funds intended for improving broadband deployment across the U.S. and $260 million in Recovery Act savings from the lower cost of construction and repair on Defense Department contracts. Also included is $900 million from non-Recovery Act Defense Department unobligated balances which will expire on September 30, 2010, and are excess to current requirements. In addition, effective June 1, 2014, food stamp benefits will return to the levels that individuals would have received in 2014 under pre-Recovery Act law.”
- New Medicaid pricing for certain drugs — Would make “inhalation, infusion, or injectable drugs that are not dispensed through retail community pharmacies” subject to pricing under the Medicaid “average manufacturer price” formula. This would result in Medicaid paying about $2.1 billion less for these drugs over the next ten years.
…The provisions regarding unemployment benefits appear to be untouched from the previous revision of 6/23.
According to my estimates (an official CBO estimate is not yet available), these changes would cut the deficit impact of the bill by about $22 billion, leaving just $33 billion unpaid for. Most of that $33 billion would be used for the extended unemployment benefits, which are designated “emergency spending” and not subject to congressional offset rules known as pay-as-you-go. Even with all these new cuts in the bill, reports are indicating that Republicans will continue to filibuster.
Senate Democrats were ready to throw in the towel late Wednesday on a months-long effort to deliver fresh aid to states and extend benefits to unemployed workers, saying Republicans had rejected their latest offer to pare down the size and cost of the package.
And Here’s HuffPo:
Democratic leaders in the Senate have apparently failed to win enough support to overcome a Republican filibuster of a bill to help the poor, the old and the jobless, despite making a series of cuts to the measure over the past several weeks to appease deficit hawks.
“It looks like we’re going to come up short,” said a senior Democratic aide on Wednesday evening. “It looks like Republicans are prepared to kill aid to states, an extension of unemployment benefits, and ironically, the Republicans are prepared to kill efforts to close loopholes that allow companies to export jobs overseas.”