Bill on jobless benefits, state financial help scaled back

By Lori Montgomery
Washington Post Staff Writer
Thursday, May 27, 2010

Under fire from rank-and-file Democrats worried about the soaring national debt, congressional leaders reached a tentative agreement Wednesday to scale back a package that would have devoted nearly $200 billion to jobless benefits and other economic provisions while postponing a scheduled pay cut for doctors who see Medicare patients.

After struggling throughout the day to reach a compromise, House leaders scheduled a Thursday vote on the slimmed-down package in hopes of pushing it through both chambers before the 10-day Memorial Day recess, which is scheduled to begin Friday. Unless lawmakers act before June 1, millions of people could cease to be eligible for up to 99 weeks of jobless benefits and doctors' Medicare payments could fall by 20 percent.

But the ultimate fate of the package was unclear as Republicans stepped up efforts to paint it as irresponsible when the recession and its aftermath are driving the nation deeply into debt -- a concern many Democrats share. According to US Debt, borrowing by the Treasury hit a milestone of $13 trillion Wednesday, or 90 percent of the overall economy.

"This is fiscal recklessness. And that's why even some Democrats are starting to revolt," Senate Minority Leader Mitch McConnell (R-Ky.) said in a speech on the Senate floor. "Far from doing anything about our own looming debt crisis, Democrats only seem interested in making it worse."

Under Wednesday's agreement, the overall cost of the package would drop from more than $190 billion to about $145 billion, senior Democratic aides said, with about $95 billion in spending not paid for through new revenue. Unemployment benefits would be extended through the end of November, instead of through the end of the year, and the doctors' pay cut would be put off only until 2012 instead of 2014.

House Majority Leader Steny H. Hoyer (D-Md.) predicted that the House would muster the votes to push forward a package that contains funding for a variety of popular programs, including more than $32 billion in expiring tax credits and deductions for businesses and individuals and $24 billion to help cash-strapped state governments. State officials, labor unions and some economists warned Wednesday that failure to approve the package could lead to further public-sector layoffs and undermine the still-tenuous recovery.

But Senate Majority Leader Harry M. Reid (D-Nev.) was noncommittal when pressed by reporters about the tax bill's chances in his chamber. "We have to see what the House sends us," he said. While expressing confidence that some form of the legislation would pass, Reid said he had yet to secure commitments from any Republicans. At least one GOP senator must defect if the tax bill is to cross the 60-vote threshold needed to avert a Republican filibuster.

But Reid said the Senate would at the very least approve an unemployment extension before adjourning this weekend. "We can't leave here unless we address that issue," he said.

Staff writer Shailagh Murray contributed to this report.

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