A bill including provisions to continue eligibility for extended federal unemployment programs through the end of 2010, which was expected to be taken up last week and then delayed, is being scaled back by Congressional Democrats who could not muster the votes for the larger original measure.
Excuse me for asking, but wasn’t crafting a bill that could pass the House and Senate — before these programs expire again — supposed to have been accomplished over the past two months?
Late last night Reuters was reporting:
Congressional Democrats cut the cost of a package of spending and tax hikes by nearly a third on Wednesday and delayed action for one more day as they raced to ensure passage before safety-net programs expire next week.
With some centrist lawmakers balking at the cost of the original package, House Democratic leaders scaled back unemployment benefits and doctor payments, according to a summary released late Wednesday.
The latest version of the legislation would add about $90 billion to the deficit over 10 years, down from $134 billion in the original legislation, according to the nonpartisan Congressional Budget Office.
“We’re determined to get this bill passed by the end of the week,” said Chris Van Hollen, a member of the House Democratic leadership.
One of the key changes to the bill is that the continuation of eligibility for the extended federal jobless programs would be November 30 instead of December 31. Eligibility for those programs is currently set to expire June 2.
Like the original bill, the scaled back version does not include a ‘Tier V’ extension of the duration of unemployment coverage beyond the current programs.
The Boston Globe reports on some of the key provisions in the scaled down bill.
■ Jobless benefits and other safety net funding. Would extend several programs designed to help the poor and unemployed during the economic recovery. The ongoing extension of unemployment insurance, which is set to expire this month, would be continued until Nov. 30. COBRA benefits, also set to expire at the end of May, would also be extended through Nov. 30.
■ Summer jobs. Would help fund 300,000 jobs for those ages 16 to 24 across the country, extending programs funded through the federal stimulus.
■ Funding for states. Would extend higher-than-normal Medicaid reimbursements for the first six months of next year, at a cost of $24 billion.
■ Change in investment income: Would tax investments by investment managers as ordinary income instead of as capital gains. This would hit the wallets of venture capital and hedge fund managers and would increase federal revenues by $19 billion over 10 years.
Meanwhile, this morning the Labor Department reported 460,000 initial claims for state-based unemployment insurance last week. First-time state unemployment claims have not dipped below 400,000 for any single week since early September 2008.
Christina Romer, head of the President’s Council of Economic Advisors, warned against cutting back on fiscal stimulus to support the economy and spur employment. Speaking at the annual meeting of the Organization for Economic Cooperation and Development (OECD) in Paris, Romer is quoted by the AP:
“It would be wrong to tighten fiscal policy immediately, as that would nip the nascent economic recovery in the bud”
“nothing would be more damaging than a protracted recession that brought about permanent high unemployment.”
Romer said there is a risk that current high cyclical unemployment in the U.S. could become permanent structural unemployment unless measures are taken to increase the pace of the U.S. economy’s recovery.
It seems that permanent high unemployment is exactly what Republicans would like to see.
The House is set to take up the newly scaled down H.R. 4213 today. The vote is expected to be close.
Call your Representative now. Call toll-free 1-888-254-5087. Tell them to pass H.R. 4213 today.