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Ben Nelson Bucks Party, Helps GOP Block Jobless Aid

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Ben Nelson is nothing if not sensitive.

In May, as the Senate stuffed a Wall Street reform amendment that would have done away with exorbitant ATM fees, the Omaha World-Herald reported that the Nebraska Democrat and several other senators had never used an ATM.

"But I could learn how to do it just like I've... I swipe to get my own gas, buy groceries. I know about the holograms," Nelson said, inviting heaps of ridicule in what nearly became a series-of-tubes moment.

Some of the attention didn't sit well with the senator. "One thing I want to correct in that World-Herald story is the suggestion that I didn't know the difference between a hologram and a bar code," Nelson told HuffPost in an interview off the Senate floor. An aide cut the interview short before the senator, furiously thumbing his Blackberry, could prove his hologram expertise. But later that day, Nelson's office sent a memo to reporters with the Encyclopedia.com definition of "holographic scanner" which, it turns out, is a device most widely used "for reading bar codes at retail checkouts." Point, Nelson.

His extraordinary sensitivity extends to his own needs and those of his constituents, but not so much the needs of his party or other senators' constituents, whom he routinely leaves hanging. Only weeks into the Obama presidency, Nelson joined a handful of moderate Republicans to oppose spending in the stimulus and succeeded in reducing the bill's size. Throughout the health care reform debate, he held firm against the public insurance option, defending insurers who are major employers in his state. During the endgame of Wall Street reform, he briefly suggested he hadn't made up his mind about the bill after praising its latest revisions.

For the past several weeks, Nelson has joined the Republican party in filibustering a measure to restore unemployment benefits for the long-term jobless, which lapsed at the beginning of June. The upshot: a legislative debacle that has made the entire Democratic party look ineffectual while 2.1 million people who've been out of work for longer than six months have missed checks. Economists no less mainstream than Mark Zandi, former advisor to Sen. John McCain (R-Ariz.), have said that the failure to reauthorize the benefits could jeopardize the economic recovery.

Deficit reduction is more important, Nelson and Republicans say. The Congressional Budget Office estimated that the original bill to reauthorize long-term unemployment benefits, a broad domestic aid package that also included business tax breaks and state Medicaid money, would have added $134 billion to the deficit over 10 years. When Senate Majority Leader Harry Reid (D-Nev.) first brought it to the floor in June, it failed with a whopping dozen Democrats voting nay. Over the next several weeks, Reid and Senate Finance Committee Chairman Max Baucus (D-Mont.) reduced the bill's deficit impact by adding revenue raisers and doing things like cutting $25 per week from every unemployment check. They got closer and closer in a series of votes, but Nelson joined moderate Republicans in saying the bill was moving in the "right direction" while still voting no. Democrats (except for Nelson) rejected Republican proposals to reauthorize the benefits and offset the cost by cutting spending elsewhere -- something that is generally not done when enacting federally-funded extended benefits during recessions.

Eventually, Reid brought forward a bill just to reauthorize the extended benefits through November at a cost of $33 billion in "emergency spending." Maine Republicans Olympia Snowe and Susan Collins voted for the bill; Nelson didn't, and, with the late Sen. Robert Byrd's seat unfilled, the bill failed by one vote.

Nelson doesn't think unemployment benefits deserve the "emergency spending" designation, which would exempt them from pay-as-you-go rules, because he doesn't buy the notion that the current jobs crisis is an emergency. "It's not like a hurricane loss, or a drought, or something that's typically referred to as an 'act of God' outside the control of the government," he said.

Nelson's position is more conservative than that of not only Collins and Snowe, but also Ohio Republican George Voinovich, who has said he would vote for the benefits if Democrats offset only half the cost.

Most projections have the national unemployment rate staying near 10 percent for the foreseeable future, but in Nebraska, unemployment stands at just 4.9 percent, and Nebraska is Nelson's focus. On June 8th, HuffPost asked Nelson about a national poll showing 74 percent of voters think unemployment benefits are more important than deficit reduction. "That may be, but that's a national poll," said Nelson. "Those aren't the numbers you'd find in Nebraska."

Nelson noted in one of his statements about offsetting the costs of unemployment benefits that the Nebraska legislature recently adopted a resolution expressing alarm over the federal budget deficit.

Nelson's objections notwithstanding, the recession is in fact similar to a hurricane or other natural disaster, only this one was caused by Wall Street. And it's not that the Congress refuses to pay for unemployment benefits because it has run amok. Unemployment insurance, rather, has two purposes: The first is to help laid-off workers in difficult times. The second is to counter a cyclical downturn: When the economy goes into recession and more workers are laid off, the government spends more money on unemployment benefits, which acts as an automatic stimulus and helps turn the economy back around. Without such stimulus, layoffs create a vicious cycle: The jobless spend less, which drives down the economy, which leads to more layoffs, and so on. Offsetting spending during a recession, with spending cuts or tax hikes, creates a drag on the recovery and undermines the purpose of the spending. Borrowing to pay for unemployment benefits is a basic tenet of the New Deal and Keynesian economics, which explains why Democrats are so dug in to defend the principle.

"When emergencies take place, they're funded," said Sen. Bernie Sanders (I-Vt.). "If it's a flood, if it's a hurricane, as Americans we come together. I think you've got to look at long-term unemployment in the worst recession in 70 years in the same sense. This is an emergency."

The defense of that principle, however, does not extend to publicly excoriating Nelson for consistently battling against the Democratic agenda. On Monday, HuffPost looked in vain for a Democrat willing to take a swipe at Nelson.

"The fact is, we've got people out there who need extended unemployment benefits and at this point don't have them and they're wondering how to pay their rent bill and buy food and we just need to get it done. It's not about any one person to find a way to solve this," said Sen. Byron Dorgan (D-N.D.), a retiring member of Democratic leadership.

Doesn't Nelson teaming with the GOP make it harder to contrast the two parties' approaches?

"The contrast is pretty self-evident. The minority party has decided to block this under these conditions and so I think that's pretty evident to everybody," said Dorgan.

"Everybody's got to make up their own minds and sometimes you're in a different place than the caucus. I've been in the same position, but I just think we should get some help for those who are out of work," said Sen. Bob Casey (D-Penn.) of Nelson. "I realize that there are folks who are focusing on strategies to deal right now with the deficit, but you're going to make the deficit worse if we don't fully recover. And part of full recovery is getting people back into jobs and opportunities that they wouldn't have absent the help. There's always a good rationale for emergency spending when it comes to unemployment insurance."

Even the Senate's lone socialist, Sanders, an independent who caucuses with Democrats, wouldn't bash Nelson specifically. "I think this an issue that every member of the Senate should be supportive of," Sanders told HuffPost. "What I would suggest to you is my Republican colleagues are very selective about their concerns about the deficit. Tax breaks for billionaires, not a problem. Helping the unemployed, serious problem."

Whatever the issue, you'll find Nelson, a staple of Washington's cocktail-party circuit, in the middle -- quite literally, in fact. He often spends a good half-hour or more answering reporters' questions before the weekly caucus lunch his party holds on Tuesdays. He pops into the meeting, grabs a quick bite and is right back out in the hallway, answering questions until none are left. The volume of words he supplies reporters puts him in a league with Olympia Snowe, yet both manage never to say much of anything.

In early 2009, Nelson joined Republicans Snowe and Susan Collins of Maine and Arlen Specter of Pennsylvania to oppose spending in the stimulus. The group managed to get $110 billion cut from the bill -- a huge portion that has slowed economic growth and caused states to lay off thousands of workers. Though $110 billion may seem like a small amount compared to the $770 bill that finally passed, its size was an illusion -- and partly explains public outrage at it.

As economist Dean Baker explains, roughly $100 billion is spending that doesn't kick in until several years down the road and another $80 billion went to pay for an alternative minimum tax patch that was going to be patched regardless, so it had zero stimulative effect. Roughly half of the stimulus was offset by spending cuts made at the state level, leaving a stimulus of $300 billion over two years, a number that was insufficient to fill the gaping hole left by the financial crisis and housing collapse. The $110 billion that Nelson managed to slash from the stimulus amounted to more than a third of the final product.

"This bipartisan agreement delivers the help millions of Americans need in this time of economic turmoil," said Nelson in a statement at the time. "It fuels two powerful engines: major tax cuts for the middle class, and targeted investments in American infrastructure and job growth. It also pares back $110 billion of spending that didn't belong in the bill. We've trimmed the fat, fried the bacon, and milked the sacred cows. What remains will fund education, an energy Smart Grid, tax credits for homebuyers and other critical infrastructure."

Nelson insisted that he wasn't just looking for a symbolic bite he could take out of the stimulus to prove his fiscal-hawk mettle. "For me it's not symbolism, it's an economic matter. At some point it's just too big," he told HuffPost at the time. Asked what number his economic analysis deemed was too big, he retreated to symbolic terrain. "It's whatever gets 60 votes, 61 votes."

Nelson's cuts went straight to the bone: He lopped $25 billion in flexible funding for states, $7.5 in education grants, $19.5 billion in construction money for schools and higher education institutions and chopped a billion from Head Start.

Today, he's blocking a six-month, $25 billion extension of FMAP -- federal aid to states -- while 30 states have already counted on the funds for next year's budget, meaning severe layoffs are on the way if the funds don't come through as promised. Nebraska, however, is not one of those 30 states and seems content to watch the rest of the nation burn. It's not conservative fiscal management that gives Nebraska its low unemployment rate and rosy budget outlook, but an economy based on lavish federal defense spending and agribusiness subsidies, combined with incentives that lure insurers to base their operations in Nebraska and soak up money from consumers in other states.

Throughout the health care debate, Nelson worked tirelessly to reduce the expansion of public health care, defending insurers who are major employers in his state. Nelson's next contribution to his party was to effectively cost it the filibuster-proof majority he consistently filibusters: He held out his health care vote until Harry Reid offered him the last-minute Cornhusker Kickback -- perpetual federal help for Nebraska's Medicaid bill. GOP leaders say that the Kickback propelled Scott Brown over the top in a special election in Massachusetts, an assertion backed by reporters on the ground, who encountered furious opposition to the backroom deal.

Nelson has been so consistently obstinate that Democratic leadership doesn't view lobbying him as very worthwhile. In fact, Harry Reid figures he'd have better luck with Brown, of all people, whom Reid called four times in 12 minutes before one of the votes that would have reauthorized extended benefits.

Two weeks ago Nelson told HuffPost he hadn't heard much from fellow Democrats about the bill. On Monday, HuffPost asked again if he'd felt any pressure to join his party.

"Some, not major, no," Nelson said. "I think they understand that my position is very clear. Let's pay for it."

UPDATE: Nelson spokesman Jake Thompson tells HuffPost that Nelson didn't demand the Cornhusker Kickback as a condition for voting for the bill. Rather, he said, his primary concerns were that no federal money be used to pay for abortions and that there be no public option. Initially in negotiations with Reid and the White House, Nelson had pushed for the federal government to pay for every state's increased Medicaid costs or at least allow states to opt out. Those options were unavailable, said Thompson, so Nelson was offered the money for Nebraska only, which he accepted.

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