Senate, House at Odds Over Funding for Jobs Bill, Health Provisions
A debate is brewing between the Senate and House over how to fund legislation (HR 4213) that would authorize extensions of unemployment benefits, higher Medicaid reimbursement rates for states and other initiatives through November at a projected cost of $140 billion, CongressDaily reports (Cohn et al., CongressDaily, 3/8).
House Democrats and the White House are objecting to proposals to fund $38 billion of the bill's cost because revenue from those proposals has been identified as a funding source for President Obama's health reform plan. The partial offsets include:
- Rescinded funding for Medicare part A and part B improvements;
- Elimination of a tax credit for the paper industry's "black liquor" fuel; and
- Rules mandating companies to prove the "economic substance" of their transactions rather than tax avoidance (Cohn/Friedman, CongressDaily, 3/5).
According to CongressDaily, the House would prefer to offset the bill's cost by taxing private-equity and other investment fund managers' "carried interest" as ordinary income instead of subjecting such income to the lower capital gains rate.
The dispute might prove to be an "early test of wills" between acting House Ways and Means Chair Sander Levin (D-Mich.) and Senate Finance Committee Chair Max Baucus (D-Mont.) after Senate passage.
Baucus has signaled that the carried interest proposal, which was championed by Levin, is unlikely to draw Senate support outside of tax reform. A new tax on large financial institutions crafted by House Democrats also might be considered for the jobs bill.
However, the Senate thus far has shown little interest.
Timeline for Action
The Senate could approve the extension through November as early as Tuesday. Alternately, the Senate could send President Obama a one-month extension of the programs later this week (CongressDaily, 3/8).
Governors Urge Senate to Move Quickly on Jobs Bill
Meanwhile, Democratic governors and senators on Friday encouraged the Senate to "act soon" on the jobs bill, CQ HealthBeat reports.
Calling her state's financial situation an "emergency," Michigan Gov. Jennifer Granholm (D) said that even with federal funds, "every state is going to have to undergo still massive cutting" in programs targeted at senior citizens, children, people with disabilities and pregnant women. "This is an urgent moment for all of us," she said.
In addition, Sen. John Rockefeller (D-W.Va.) noted that enacting the bill into law must "happen really quickly" because states are finalizing their budgets.It remains unclear whether Republicans will attempt to filibuster the legislation, but Sen. Carl Levin (D-Mich.) said he believed the effort would be unsuccessful because a bipartisan group of governors has endorsed the bill and Republicans are not likely to "stand together against the essential support for states' Medicaid programs" (Norman, CQ HealthBeat, 3/5). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.