Crucial Vote Set on Unemployment Benefits, Tax Credit Extensions Bill - Failure Possible

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Senate Majority Leader Harry Reid, D-NV, set Wednesday as showdown day with Republicans and some members of his own party, over a $141 billion "extenders" bill.

A pretty boring-sounding name for a bill, but it has crucial extensions of tax credits, unemployment insurance benefits, and other key items in it.

It also contains a critical payment update for doctors and other providers who treat Medicare patients, so that they don't get hit with a whopping 21% cut in their federal reimbursements.   Congress usually always "fixes" this cut that comes from a funding formula set up years ago.   Many want to fix this problem, but it's costly -- and members never can seem to agree on how or whether or not to pay for a permanent fix.

Anyone who knows a senior on Medicare likely has heard nightmare stories of them having a terrible time even finding a doctor who will treat them, and this delay will, no doubt, cause more heart burn in an industry that is already service-averse.

On that front, CMS has just issued a statement to providers that continues what amounts to a "stop payment" directive -- holding off on payment to the docs until Congress can get rid of the cut.  The statement acknowledges that this delay "may present cash flow problems for some (doctors)", but it also hopes for Congressional action "in the very near future."

CMS gives Congress until June 18 to act.

And it remains to be seen just what Congress will do.

Reid is coming up short trying to find the 60 votes he needs to shut down debate on the broader "extenders" bill, and the fight is primarily over the bill's price tag and the fact that it sends nearly $80 billion directly to the deficit.    Sky high deficits are affecting everything Congress does these days.

The GOP alternative would nix $24 billion in Medicaid spending for cash-strapped states, a priority for Reid, and would drop the tax increases in the Dems' bill --- revenue from both the oil & gas industry, as well as from the investment & real estate industries.

This alternative, authored by Sen. John Thune, R-SD, would cut the deficit by $55 billion by grabbing $38 billion in unallocated stimulus funds, freezing federal salaries, and imposing a 5% across-the-board cut in government spending for all agencies except the VA and DOD, among other provisions.

"I think this amendment ought to be a no-brainer," Thune told his colleagues on the Senate floor Monday.

Meanwhile, Sen. Tom Coburn, R-OK, aka: "Dr. No", has introduced an amendment (a good deal of it Thune also includes in his measure) that would seek to pay for the Democrats' bill through a variety of means.  It would reduce members' office budgets by a one-time $100 million; target, like Thune, agencies for a 5% across-the-board cut; require the sale of unnecessary government property; collection of unpaid taxes from federal government employees (a whopping $3 billion from this!); and more.   See it here.

Some of Reid's members, with support from the White House and some Dems in the House, want to add $23 billion for teachers that are expected to be laid off soon, but there does not appear to be enough support for this, again, because of the addition to the nation's deficit.

House Majority Leader Steny Hoyer, D-MD, was right over the weekend when he said, "There's spending fatigue on Capitol Hill and around the country."  And once Reid can complete action on this bill, which aides say should be by week's end, it must go to the House where its fate is uncertain.

The real conundrum for Democrats is --- how do you get enough support for policies that will create jobs (gotta move that near-10% unemployment rate ---- there's NEVER been a sustained rate above 9% for an entire election year), while also not adding to the deficit?