Blue Dogs Cut House Extender Package – Senate Delays Action

With authorization for longer unemployment benefits and COBRA subsidies expiring after Memorial Day, the House passed a cut back version of the extender legislation this week, but the Senate adjourned without taking any action, once leaving out of work Americans whose benefits expire in limbo until Congress reconvenes June 7. Fiscally conservative House “Blue Dog” Democrats cut $33 billion from the proposed legislation before it passed, and separated out $23 billion in Medicare doctor reimbursement extensions for consideration apart from unemployment benefits. Both House measures now extend doctor pay and unemployment compensation only through November 2010 rather than through June 2011 as originally proposed.

As passed by the House, the bills will still increase the federal budget deficit by $50 billion, and the Senate threatens to reinstate the June 2011 cutoff date when it reconvenes June 7. The House measure also includes $6 billion for federal bond issues to support local and state infrastructure construction projects.

Of course, all these Senators and Congressmen are getting their regular paychecks while they keep out of work Americans waiting two or three more weeks for their next benefit payments.

Extenders In Jeopardy

Leaders in both the House and the Senate are threatening to keep their bodies in session through the Memorial Day recess, in spite of members desire to travel home to their respective districts now for holiday parades and rallies. Nevertheless, it looks like the proposed legislation extending unemployment and COBRA benefits, along with Bush era tax breaks for individuals and small businesses, and Medicare payment levels for physicians, is doomed. Neither House nor Senate leaders have the votes to pass the proposed extenders through year end, because of the cost to the federal government. While the House could probably pass a three month extension, even that short relief appears to fall flat in the Senate, leaving those still looking for work whose benefits have already run out, or will run out soon, with little hope of further relief.

Senators and Congressmen who face tough reelection battles have added a number of revenue raising measures to the extender proposal, including an increase in oil excise taxes from eight cents to 32 cents per barrel, limits on corporate use of foreign tax credits, and a 157% increase in the tax rate venture capitalists pay on “carried interest” earnings. Business lobby protests over these tax increases could scuttle the entire benefits extension package. In addition to extension of benefits for the jobless, the bill also includes $24 billion in assistance to state governments with serious budget deficits, $6 billion to fund summer job programs for young people, and $65 billion to postpone pay cuts for doctors treating Medicare patients.

Fiscal discipline went out the window when the Obama administration wanted to stimulate the economy and pay for nearly universal health care benefits, but now that midterm elections are approaching it seems like Congress is completely willing to try balancing the federal budget on the backs of those who have still been left behind by the effects of the stimulus measures.

“Extenders” Delayed Another Week

Despite the pain and agony additional delay is inflicting on every American citizen out of work and looking for it, Congress has delayed action for an additional week on legislation extending unemployment benefits for folks whose checks ran out weeks or months ago. The “extenders” of unemployment and COBRA benefits, Bush era tax breaks for individuals and small businesses, and other essentials for the survival of the economically disadvantaged, was supposed to be put to a vote last week. Neither house of Congress is prepared to act, in spite of the fact that the last temporary extension of these provisions expires over the Memorial Day weekend.