Committee for a Responsible Federal Budget

Senate Seeks to Terminate Extenders Debate

Jun 15, 2010 | Health Care| Taxes

The Senate will seek an end to the extended debate over tax extenders legislation tomorrow with a cloture vote on HR 4213 even though it is not clear that the bill has the 60 votes necessary to cut off debate and move to a vote on final passage. Concerns about the cost of the package, much of which is not paid for, is the main point of contention.

The House version of the bill, which extends some popular tax breaks, expanded unemployment insurance and the Medicare doc fix, passed narrowly just before Memorial Day after leaders there significantly scaled down the measure in response to cost concerns from members. Senate leaders had sought to restore some of the funding, including $24 billion in Medicaid matching funds for states. However, senators are expressing the same anxiety over the debt impact as their House colleagues, causing Senate leaders to consider paring down the bill so that it is closer in cost the House version.

Senator John Tester (D-MT) introduced an amendment to eliminate the extra unemployment compensation ($25 per week) originally provided by the Recovery Act, which would shave $6 billion off the cost of the bill. CongressDaily reports that Senator Max Baucus (D-MT) is preparing a scaled-down version that will shorten the extension of the doc fix to perhaps seven months and decrease the state Medicaid aid. At the same time, Senator Bob Casey (D-PA) wants to restore the $7 billion COBRA subsidy for unemployed workers that the House jettisoned. Votes on amendments may occur today.

Republicans have offered their own version in the form of an amendment from Senator John Thune (R-SD) that would completely offset the costs of the extensions through spending cuts elsewhere. The Congressional Budget Office estimates the proposal will reduce the deficit by about $68 billion. Its provisions include rescinding $38 billion in unobligated stimulus funds; cutting wasteful federal spending; freezing the salaries of federal employees; instituting a five percent across-the-board-cut in federal spending (exempting the Departments of Defense and Veteran’s Affairs); and pairing the doc fix with medical malpractice reform.

It is about time that lawmakers start thinking about paying for legislation. As we argued yesterday, CRFB is not opposed to well-designed stimulus, but we believe that such measures be offset over the longer run so that they do not add to the debt. What we object to is deeming every initiative as “emergency” spending and as a “jobs” bill with no intention of mitigating its impact on the long-term debt. Lawmakers should work together to develop credible measures. Extending the long-term debt will not help the economy.