Senate Approves Safety Net and Tax Break Extensions
The Senate has just approved, by a 62-36 vote, HR 4213, which extends unemployment compensation and COBRA benefits for the unemployed, along with many tax breaks, until the end of the year. Democratic leaders have promoted it as a jobs bill. Differences with the much-smaller House version must now be worked out.
Most of the estimated $140 billion cost of the package is not offset. The unemployment and COBRA provisions, in addition to a seven-month delay in a 21 percent reduction in Medicare physician payments were deemed “emergency” spending not subject to PAYGO. The bare minimum of 60 Senators voted to waive a PAYGO point of order raised against the bill.
The small offsets in the bill, approximately $35 billion, are a point of contention because the House and White House want to use them to partially pay for health care reform.
CRFB called for longer term offsets for the entire package to ensure it does not add to the debt. An amendment from Senators Jeff Sessions (R-AL) and Claire McCaskill (D-MO) to institute discretionary spending caps fell one vote short. Another amendment from Senator Tom Coburn (D-OK) to increase transparency of Senate spending outside of PAYGO passed unanimously 100-0.
Sustaining the recovery will require us to convince markets and our creditors that we are serious about addressing our debt. Perhaps the House can compel more aggressive offsets, like they did last week with a $17.6 billion measure providing payroll tax incentives for employers who hire unemployed workers.