WASHINGTON – Senate Republicans on Thursday defeated Democrats’ showcase election-year jobs bill, including an extension of weekly unemployment benefits for millions of people out of work more than six months.

The 57-41 vote fell three votes short of the 60 required to crack a GOP filibuster, delivering a major blow to President Obama and Democrats facing big losses of House and Senate seats in the fall election.

Maine’s two senators, Republicans Susan Collins and Olympia Snowe, voted with the minority.

The rejected bill would also have provided $16 billion in new aid to states, preserving the jobs of thousands of state and local government workers and providing what White House officials called an insurance policy against a double-dip recession. It also included dozens of tax breaks sought by business lobbyists, and tax increases on domestically produced oil and on investment fund managers.

The demise of the bill means that unemployment benefits will phase out for more than 200,000 people a week. Governors who had been counting on federal aid will now have to consider a fresh round of budget cuts, tax hikes and layoffs of state workers.

“This is a bill that would remedy serious challenges that American families face as a result of this Great Recession,” said Max Baucus, D-Mont., the chief author of the bill. “This is a bill that works to build a stronger economy. This is a bill to put Americans back to work.”

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The bill has been sharply pared back after weeks of negotiations with GOP moderates Snowe and Collins of Maine. The most recent version, unveiled Wednesday night, contained new cuts to food stamps and pared the state aid provision to allow Democrats to claim the measure was fully paid for except for the unemployment insurance extension.

That didn’t move Republicans like Minority Leader Mitch McConnell of Kentucky.

“It adds new taxes and over $30 billion to an already staggering 13 trillion-dollar national debt,” said McConnell.

Only one Democrat, Ben Nelson of Nebraska, voted with Republicans. Another, Robert Byrd of West Virginia, did not vote.

After the Senate vote, the House passed by a 417-1 vote a measure to reverse a 21 percent federal fee cut imposed last week on doctors providing care to seniors on Medicare. That measure was one of the most important contained in the now-dead catchall bill, but was broken out and passed separately by the Senate last week.

The House’s move would send the stand-alone Medicare fee fix to Obama for his signature.

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Democrats hope that political pressure from voters outraged about the cutoff of jobless benefits averaging $300 a week and from business groups seeking renewal of longstanding tax breaks might eventually revive the bill.

The latest version of the measure contains a variety of provisions sought by lawmakers in both parties, anchored by the jobless aid and the tax cuts sought by the business groups. The latest draft would add $33 billion to the deficit – down from the $80 billion deficit impact of the measure when it came to the floor two weeks ago.

The catchall measure also includes farm disaster aid, $1 billion for a youth summer jobs initiative and an extension of a bond program that subsidizes interest costs for state and local infrastructure projects. It would levy a new tax on investment fund managers but extend tax breaks such as lucrative credits that help businesses finance research and develop new products.

 


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