Stymied by GOP, Democrats mulling stand-alone jobless aid to help pump up economy

WASHINGTON (AP) — The demise of Democrats' jobs-agenda legislation means that unemployment benefits will phase out for more than 200,000 people a week. Governors who had counted on fresh federal aid will now have to consider more budget cuts, tax increases and layoffs of state workers.

Democratic officials said the House may try to revive the long-stalled jobless aid bill next week as a stand-alone bill shorn of controversial tax and spending provisions that prompted Senate Republicans to filibuster it on Thursday.

But the Senate may not have enough time to clear the measure for President Barack Obama's desk before leaving Washington for the Fourth of July recess. The impasse has meant that more than 1.2 million people have lost unemployment benefits averaging $300 a week.

The aides required anonymity to speak freely about internal party strategy.

Stymied by Republicans, Democrats are at a loss as they struggle to help pump up the economy in the run-up to congressional elections this fall.

Senate Democrats cut billions from the bill in an attempt to attract enough Republican votes to overcome a filibuster. But the 57-41 vote Thursday fell three votes short of the 60 required to crack a GOP filibuster.

"Democrats have given Republicans every chance to say 'yes' to this bill and support economic recovery for our middle class," said Senate Majority Leader Harry Reid, D-Nev. "But they made a choice to say 'no' yet again."

President Barack Obama will keep pressing Congress to pass the bill, his spokesman said. But Democrats haven't shown they can come up with the votes.

That's leading Democrats to consider breaking the jobless aid measure from the catchall bill and try to pass it as a stand-alone $33 billion measure next week before leaving Washington for a weeklong Independence Day recess. Key Senate Republicans, Olympia Snowe and Susan Collins of Maine, are pressing the idea.

But a Reid spokesman said the majority leader is committed to passing a Wall Street reform bill next week and predicted Republicans would block any move to do a stand-alone jobless aid bill after that measure passes.

The stand-alone approach proved to be the way forward for a measure to temporarily spare doctors from a 21 percent cut in Medicare payments, which Obama signed Friday.

The Medicare funding had been a part of the larger bill to provide extended unemployment benefits for laid-off workers and provide states with billions of dollars to avert layoffs. When it became clear Senate Republicans would block the larger bill, Democrats begrudgingly voted for the smaller Medicare fix.

"It is clear that Senate Republicans have no intention of passing any jobs legislation, whether it is tied to physician payments or not," said House Speaker Nancy Pelosi, D-Calif.

Congressional Democrats began the year with an aggressive agenda of passing a series of bills designed to create jobs. One has become law, offering tax breaks to companies that hire unemployed workers. Others stalled as lawmakers, after hearing from angry voters, became wary of adding to the national debt, which stands at $13 trillion.

"The debt is out of control," said Sen. Scott Brown, R-Mass.

Republicans said the bill would have expanded government, not boosted the economy.

"The only thing Republicans have opposed in this debate are job-killing taxes and adding to the national debt," said Senate Republican leader Mitch McConnell of Kentucky. "What we're not willing to do is use worthwhile programs as an excuse to burden our children and our grandchildren with an even bigger national debt than we've already got."

The rejected bill would 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.

Sen. Max Baucus, the bill's chief author, said Friday that Democrats may wait a week or two before attempting again to push the bill through.

"There 's a lot of people not getting their unemployment checks. There's going to be consequences of that," he said, adding that could put additional pressure on Republicans to support the bill.

Baucus said "we'll wait and work on other legislation in the interim. ... There were some bitter partisan feelings when we left. Maybe a little cooling off will help."

The legislation had been sharply pared back after weeks of negotiations with GOP moderates Snowe and Collins, but they were not persuaded to support the measure. The latest draft would have added $33 billion to the deficit.

The Medicare bill signed by Obama delays cuts in payments to doctors until the end of November — after congressional elections — when lawmakers hope the political climate is better for passing a more permanent, and expensive, solution.

There was some urgency to approve the funding because Medicare announced last week it would begin processing claims it had already received for June at the lower rate. Lawmakers said some doctors have already stopped seeing new Medicare patients because of the cuts.

The bill increases payments to providers by 2.2 percent. The legislation, which costs about $6.5 billion, is paid for with a series of health care and pension changes that both Democrats and Republicans agreed to.

The Medicare cuts were required under a 1990s budget-cutting law that Congress has routinely waived. The latest extension expired May 31 after concerns about adding to the budget deficit held up the larger bill that also included unemployment benefits.

Obama praised Congress for passing the measure, while urging lawmakers to work on a more permanent solution.


Associated Press writer Matthew Brown in Billings, Mont., contributed to this report.