Washington Molasses: Jobs, Supplemental Bills Stalled in Congress
So what’s happening on this jobs bill? You got me.
The House hasn’t done a thing on the nearly $200 billion dollar measure, which includes extensions of expiring tax break, safety-net extensions, a doc fix, infrastructure and summer youth job funding and a host of other provisions, offset by $56 billion in new fees on the oil industry, a permanent closure to the carried-interest loophole and ending tax breaks to companies that ship jobs overseas. Harry Reid is waiting on the House to figure out what to do. Steny Hoyer has been dropping hints all day, but the foot-dragging suggests that he doesn’t actually have the votes to pass this, with Blue Dogs choking on the cost.
Each day that the House doesn’t pass the spending bill, which must originate in their chamber, the Senate waits another day for passage. They’re supposed to leave town for a week on Friday, and unemployment and COBRA benefits expire shortly thereafter. So they would need to work well into next week now to get the extenders bill from the House, defeat a cloture vote and pass it.
The Republicans, sensing an opening, submitted their own alternative extenders bill, with offsets from the federal stimulus – you know, that program which has created millions of jobs and added over 4% to overall GDP in the first quarter. Yeah, let’s drain that swamp.
As for the education jobs funding, the White House actually came out strongly for it late today, and House leaders as well at a press event with the NEA, but it’s still unclear if that provision will survive, or when the House will produce a supplemental bill (presumably after the Senate votes on theirs, which hasn’t happened yet either).
Over half of this week, with all these consequential bills in limbo, has been wasted, as the Democratic Party tries to figure out who they fight for.
On one side: teachers, doctors and their patients, the jobless, disaster victims, the troops.
On the other: private equity firms, hedge funds, venture capitalists, real estate partnerships and bond holders.
It would be hard to fashion from scratch a more politically potent standoff, yet the Republican Party is barely being forced to fight — as Democratic lawmakers balk at deficit spending and hesitate to close a tax loophole on a wealthy class of investors with close social and political ties to powerful Democrats […]
The bill, pitting the jobless against the cream of Wall Street, should not present a difficult choice for Democrats. But its passage is so far from assured that Max Baucus, a Democrat from Montana who is routinely at odds with the party base, chastised his caucus during a Tuesday lunch meeting. “This is why we came here,” an unusually fired-up Baucus urged.
The Senate can’t act on the bill until the House sends it over. There’s been something of a Catch-22 at play, with rank-and-file House Democrats unwilling to lend support without a guarantee from Senate Majority Leader Harry Reid (D-Nev.) that he can round up a 60-vote supermajority to pass the bill. House Democrats are thinking, “Why bite the bullet if it’s not going anywhere? Why take the hard vote?” said Rep. Danny Davis (D-Ill.), who supports the bill. Rep. Chris Van Hollen (D-Md.), said Tuesday evening that House leadership wanted more assurance from Reid.
Those are just excuses. At the root of this really does appear to be that carried interest loophole, which everybody wants for the revenue but nobody wants for the hassle of actually taking the fair amount of taxation out of the pockets of wealthy contributors. This is just sad:
Baucus and House Ways and Means Chairman Sandy Levin (D-Mich.) agreed in principle two weeks ago that the spending would be offset by closing the loophole. They set about working out the details, but have encountered stiff resistance from within the party. In the Senate, John Kerry (D-Mass.), Maria Cantwell (D-Wash.), Bob Menendez (D-N.J.), Mark Warner (D-Va.), Jeanne Shaheen (D-N.H.), Bob Casey Jr. (D-Pa.) and Patty Murray (D-Wash.) have all expressed a variety of reservations about paying for the jobs measures on the backs of fund managers. On the House side, high-ranking Democrats have spoken out in two separate closed-door caucus meetings this week against taking the vote against the hedge fund crowd.
“I have, overall, a concern about the carried interest loophole as it relates to both characterization rates and implementation period and I think that we can derive revenue that we want and should need, but I think there is a different way to do it,” said Menendez on Tuesday. A Menendez aide said that he wants to ensure that the real estate market is not harmed and that businesses don’t lose access to venture capital.
Glover Park Group is lobbying against carried interest on this one.
So two major bills, probably the last two “must-pass” bills of the year, are mired in only-in-Washington arguments about deficits in a time of massive job loss, and protecting money managers after a finance-induced economic crisis. And as a result we may see stop-gap solutions, more kick-the-can bills that again sap confidence in the ability to govern.
UPDATE: And now we’re seeing the inevitable scale-back, although it’s hard to assess without a few more details. If it’s just pulling back the extension dates on things that will be extended anyway, that won’t be much of a price to pay for passage.