Congressional Democrats downshift on spending, cut provisions to jobs bill

By Lori Montgomery and Shailagh Murray
Washington Post Staff Writer
Saturday, May 29, 2010

Congressional Democrats, worried about public perception that government spending is out of control, tapped the brakes on Friday. After agonizing all week, the House narrowly approved a jobs bill, but only after stripping it of provisions that would have extended health insurance subsidies for the unemployed.

Normally, Democrats would have little trouble drumming up votes to help jobless workers. But as the economy shifts from recession to recovery, many lawmakers say their constituents are more interested in curbing the soaring national debt than in spending to aid the afflicted. Democratic moderates and freshmen who face tough races in November are applying new scrutiny even to broadly popular programs.

"What might have been acceptable a month ago has moved," said Rep. Gerald E. Connolly (D-Va.), who voted against the jobs bill while praising House leaders for scaling it back. As the election approaches, he said, "there is going to be a fiscal standard that is, frankly, much more rigorous."

Approving a new spending bill isn't typically a sign of frugality, and Republicans mocked the idea of a new rigorous standard, noting that the bill would cost an estimated $116 billion. But Democrats had sliced tens of billions of dollars from their original proposal, cutting the deficit impact by two-thirds.

Even the trimmer package faces an uphill climb in the Senate, whose members left town late Thursday for the 10-day Memorial Day holiday break. The stalemate leaves in limbo an estimated 5.3 million jobless workers who rely on federal emergency unemployment benefits. Those benefits cannot be renewed after next week unless Congress acts.

At 9.9 percent, the jobless rate is higher than when Congress first triggered emergency benefits in 2008 and expanded last year as part of the $862 billion stimulus package. Andrew Stettner, deputy director of the National Employment Law Project, said it would be a mistake to abandon jobless workers on the altar of the "the deficit craze."

"This is the worst labor market we've had since the Second World War," he said. "We can't just say we're done with it."

The ambivalence over the jobs package underscores the broader deficit anxiety that is finally stanching the flow of cash Washington has pumped into the economy over the past two years. President Obama on Friday threatened to veto a House-approved defense authorization bill because it would finance a fighter jet engine the Pentagon considers unnecessary.

"Our military does not want or need these programs being pushed by the Congress," Obama said. "And should Congress ignore this fact, I will veto any such legislation."

The travails of the jobs bill illustrate just how the climate has changed. Two weeks ago, two powerful committee chairmen, Sen. Max Baucus (D-Mont.) of Senate Finance and Rep. Sander M. Levin (D-Mich.) of House Ways and Means, confidently unveiled the package, then a nearly $200 billion grab bag of provisions they hoped to push to passage before Congress left on vacation.

With the joint release, Baucus and Levin signaled the skids were greased in both chambers for a bill that would tidy up an array of loose ends. Dozens of tax breaks benefiting businesses, individuals and special interests ranging from NASCAR tracks to Puerto Rican rum makers had expired at the end of 2009 and needed to be extended. Jobless benefits were set to run out at the end of May. Governors from both parties were clamoring for more federal aid to fill their budget gaps.

A deadline was looming, too, for the "doc fix," a patch that prevents doctors who see Medicare patients from absorbing a sharp pay cut. Baucus and Levin proposed to postpone the pay cut, set to take effect next week, until 2014, at a cost of $65 billion.

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