Senate Republicans and a handful of Democrats Saturday defeated a bill to reauthorize unemployment benefits for the long-term jobless and a plethora of tax provisions for the middle class not because of the bill's trillion-dollar deficit impact, but because it did not include tax cuts for the rich.
"In economic times like these, 9.8 percent unemployment, you should not raise taxes on anyone," Sen. John Barrasso (R-Wyo.) told HuffPost.
Two bills were defeated. By a vote of 53-36, seven short of the 60 needed to break a filibuster, the Senate rejected a measure by Sen. Max Baucus (D-Mont.) that would have preserved Bush era tax cuts for lower- and middle-income taxpayers, but would have allowed cuts for people earning more than $200,000 a year to expire. Democrats Joe Manchin (W.Va.), Ben Nelson (Neb.), Jim Webb (Va.), Russ Feingold (Wisc.) and Independent Democrat Joe Lieberman (Conn.) joined Republicans in voting nay. The Senate also rejected a bill by Sen. Chuck Schumer (D-N.Y.) that would have extended all the cuts, but not for anybody making more than $1 million.
The Baucus bill would have preserved Emergency Unemployment Compensation and Extended Benefits Programs created in 2008 as a customary response to rising unemployment. The programs provide up to 73 weeks of federally-funded benefits for when layoff victims exhaust the standard 26 weeks of state-funded aid. The programs lapsed last week, threatening a holiday cutoff for two million unemployed.
After Saturday's vote, it seems the only way Democrats will be able to overcome Republican opposition to the benefits will be by attaching them to a reauthorization of tax cuts for the rich.
Sen. Bob Corker (R-Tenn.) said after the vote that he expected a tax cut deal to be reached by Thursday.
Sen. Schumer said at a press conference that some Democrats would be willing to drag the tax debate on into January. "There are lots of people in our caucus who do have that appetite, there are some who don't. We'll have to see what happens."
Corker declined to say whether he thought unemployment would be included in the deal, as did Senate Minority Leader Mitch McConnell (R-Ky.).
Republicans and conservative Democrats have opposed reauthorizing the benefits without offsetting their deficit impact by cutting spending from elsewhere in the budget. But those same lawmakers have not insisted that tax cuts for the rich, estimated to cost nearly $700 billion over 10 years, be offset in any way. A yearlong reauthorization of unemployment benefits would cost roughly $60 billion.
During debate on the Senate floor before the vote, Schumer asked Sen. Chuck Grassley (R-Iowa) about Republicans' different positions on deficit reduction.
"Could he please explain to me why it is OK to take $300 billion of tax cuts for those at the highest income levels, above a million, and not pay for it," Schumer said, "and yet we have to pay for unemployment insurance extensions?"
"The taxpayers are smarter than we in Congress are," Grassley responded. "They know that if they give another dollar to us to spend it's a license to spend $1.15. So it just increases the national debt. And when it comes to paying for unemployment compensation, we can pay for unemployment compensation because the stimulus bill was supposed to stimulate the economy and it's not being spent. And if you put money from stimulus into unemployment, you don't increase the deficit and you'll also have the money spent right away."
Over the summer, when extended unemployment benefits were interrupted for 2.5 million people as the Senate dithered, Republicans offered to pay for the benefits by using unspent funds from President Obama's February 2009 stimulus bill. The GOP has offered to pay for unemployment benefits this time around, however, not with stimulus funds, but with unspent funds to be determined by the Office of Management and Budget. (Many members of Congress have seemed confused about unemployment legislation.)
Senate Majority Leader Harry Reid (D-Nev.) said during floor debate that Republicans are taking their strategy from Lucy van Pelt, the cartoon girl who takes the football away right before Charlie Brown tries to kick it.
"We've all heard Republicans weep for the deficit they say they fear. Democrats agree that we need to do something about it," Reid said. "But what did Republicans do? They pulled away the football and said: Rather than reduce the deficit, we'd really rather give an unnecessary, unwanted and unaffordable handout to the richest of the rich."