Jobs Bill a Tough Call for Democrats

Lawmakers eye the federal deficit and election-year politics.

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With the unemployment rate stuck at around 9.7 percent, a Senate vote on a bill to extend unemployment benefits and boost job creation should be an easy "yea," a way to win points with voters in a tough economy. But this year is different. Just such a measure flopped last week and the finger-pointing in Washington is aimed in one direction: toward the nation's nearly $13 trillion debt.

Senate Majority Leader Harry Reid tested the anti-spending mood last Wednesday with a procedural vote on whether to waive pay-as-you-go budget discipline on the jobs bill, the latest version of a catchall package that extends a variety of stimulus provisions. Even after Democrats spent much of last Tuesday slimming the legislation—for instance, cutting $25 from weekly long-term-unemployment payments and shortening Medicare doctors' pay-cut reprieve—the motion failed 45 to 52. Reid blamed the loss on Republicans. "I am disappointed that despite high unemployment numbers in Nevada and across the nation, not one Republican voted to provide out-of-work Americans the support they need to make ends meet," the Nevada senator said. [See who gives the most to Reid's campaigns.]

Yet, Wednesday's vote shows that anti-spending sentiment has crossed party lines. Twelve Democrats broke with Reid and voted against the package, which would have added close to $80 billion to national debt over 10 years. When asked why, Democrats such as Virginia's Jim Webb and Wisconsin's Herb Kohl said that they support provisions to help the unemployed but think Congress could work harder to pay for them. "At some point, you just have to draw the line and say enough is enough when it comes to deficit spending," said Arkansas Democratic Sen. Mark Pryor, who also voted against the bill. "What you're seeing in the Senate [are] more and more senators being aware of the impact that some of the spending has on the national debt." Politically moderate Democrats are also wary of being vulnerable in the fall campaigns to GOP and Tea Party attacks as big-government spenders. [See which industries give the most to Kohl.]

Max Baucus, chairman of the Senate Finance Committee, took the Senate floor last week to warn of the dangers of a renewed recession if the government abruptly cuts spending. While the deficit's size is a major concern, many economists say the more immediate worry is that it is too early in a weak economic recovery to cut stimulus spending.

President Obama sent a letter to Congress on June 12 asking for quick action on spending needed to ensure that the economy doesn't "slide backwards." Those measures include extending unemployment benefits, $24 billion in Medicare payments, and $23 billion to help states save teachers' jobs. His request drew a cool response in both the Senate and the House, where Democrats are also experiencing spending jitters.

During 24 hours of vote-hunting, Reid further scaled back the Senate bill so that it would add $55 billion to the deficit over 10 years; but it still fell four votes short Thursday night, 56 to 40. As a result, more than a million people will stop receiving federally funded, extended unemployment benefits by July 1.