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Senate blocks $60 billion infrastructure plan, another part of Obama jobs bill

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The Senate shot down another piece of President Obama’s $447 billion jobs bill Thursday, as a stalemated Congress goes through the motions of attempting legislation to spur economic growth largely as a mechanism to allow each party to blame the other for the failure to act.

The chamber failed to advance a measure to spend $50 billion on highway, rail, transit and airport improvements and another $10 billion as seed money for an infrastructure bank designed to spark private investment in construction. The vote was 51 to 49 in favor, but the measure needed 60 votes to proceed to a full debate.

The failure came in advance of a jobs report due out Friday morning that will show the trajectory of the job market in the final quarter of the year. So far, there are signs that employers are shrugging off the ill effects of Europe’s troubles and volatile financial markets and are continuing to hire at a gradual pace. The September unemployment report relieved concerns about massive waves of layoffs, and last week the Commerce Department said the economy grew at a 2.5 percent annual rate in the summer months, its fastest clip in a year.

The Labor Department also reported Thursday that the number of people filing new claims for unemployment insurance benefits fell last week to 397,000, from a revised 406,000 the previous week. That was the lowest level in five weeks. Also Thursday, a survey from the Institute for Supply Management on activity at the nation’s service businesses was little changed, at 52.9 in October compared with 53 in September. Numbers above 50 indicate expansion.

Meanwhile on Capitol Hill, all 47 Senate Republicans joined Sens. Ben Nelson (D-Neb.) and Joseph I. Lieberman (I-Conn.) in opposing the Obama infrastructure measure, which would have been funded with a 0.7 percent surtax on those making more than a million dollars a year.

“It makes no sense when you consider that this bill was made up of the same kinds of common-sense proposals that many of these Senators have fought for in the past. It was fully paid for,” Obama said in a statement issued by the White House.

Democrats have been trying to move Obama’s American Jobs Act forward plank by plank, without much success, since the Senate blocked the package in its entirety last month.

The Senate had already blocked another element of the plan that would have provided $35 billion in aid to states to hire teachers and first responders. Democrats have indicated they will ask the Senate to vote on other pieces of the plan, including extending a payroll tax holiday for workers and benefits for the unemployed, and offering new tax incentives to businesses to hire veterans and the long-term unemployed.

Also Thursday, Democrats joined to block a separate Republican proposal to extend the government’s highway spending authority for the next two years and roll back some environmental regulations. A procedural motion to advance the measure was rejected 53 to 47. The current highway spending authority will lapse in February.

Parties trade barbs

The two sides traded accusations that each was holding votes merely to paint the other as obstructionists.

“What we’re saying is that people who make all this money, more than a million dollars a year, should contribute to this restructuring of our economy,” Senate Majority Leader Harry M. Reid (D-Nev.) said of Democrats’ proposal for higher taxes on the wealthy to cover government spending in areas such as infrastructure.

Reid’s GOP counterpart, Senate Minority Leader Mitch McConnell (R-Ky.), said Democrats were disingenuous about trying to pass the bill, because they included tax increases they knew Republicans would oppose. “The Democrats have deliberately designed this bill to fail,” McConnell said. “So the truth is, Democrats are more interested in building a campaign message than in rebuilding roads and bridges.”

In the GOP-held House, Republicans do not plan to vote on Obama’s bill. Instead, they have passed a series of measures to repeal regulations and spur small-business growth. They charge Senate Democrats with failing to move their ideas ahead.

“Many of these bills have broad bipartisan support, and there’s no reason for the Senate not to take them up,” said House Speaker John A. Boehner (R-Ohio). “Unfortunately, they’re just allowing these bills to gather dust, and I don’t think that’s acceptable.”

Boehner told reporters Thursday that Republicans support infrastructure spending and would move a bill before the end of the year to pay for road construction with new revenue from expanded domestic energy production, including drilling.

Despite polls that show job creation is the top priority for most Americans and that their confidence in Congress’s ability to address the nation’s economic challenges is at an all-time low, the debate has moved little in recent weeks.

Although the parties joined to approve free-trade agreements with Panama, Colombia and South Korea that both sides agreed would spur job growth, the stalemate has largely reflected a fundamental disagreement over what government can do to create growth.

Ideological divide

Democrats are eager to invest taxpayer dollars in programs that could result in hiring and have proposed paying for it with higher taxes on the wealthy. Republicans argue that government spending stifles growth and that repealing regulations and cutting taxes would free the private sector to expand.

With ordinary legislating stuck, the debate on jobs bills has largely faded into a rhetorical exercise as lawmakers await the outcome of negotiations of a special bipartisan deficit-reduction panel tasked with cutting at least $1.2 trillion from the nation’s debt over the next decade.

The panel has been offered extraordinary powers; the strategy it recommends will receive a straight up-or-down vote in both the House and Senate, with no amendments or filibusters allowed. Democrats remain hopeful that the “supercommittee” might package some elements of the president’s jobs plan with its recommendations. But the committee remains at an impasse, with a Nov. 23 deadline looming.

As the Senate voted Thursday, about 30 protesters affiliated with the group OurDC, which received seed money from the Service Employees International Union, occupied a waiting area of McConnell’s third-floor office in the Russell Senate Office Building, demanding to meet with the minority leader. His office said they departed without incident when the office closed.

“The senator needs to see their pain, hear their stories, and really needs to look them in the eye,” said James Adams, one of the group’s organizers.

Staff writers David A. Fahrenthold and Neil Irwin contributed to this report.

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