Once more Senate Republicans have shown that they care less about the American people than they do about obstructing legislation supported by the President, this time it is over the extension of long term unemployment benefits.
It appears that an agreement is near to extend the benefits which lapsed in December. Republicans have been demanding that the cost of reviving the extension must be offset elsewhere in the budget, yet they rejected an offer in January by Democrats to extend the Medicare provider cuts included in sequestration through 2024 in order to offset the costs.
At the time Mitch McConnell had also demanded that he be allowed to add an unrelated amendment to the bill which would have delayed the individual mandate of Obamacare. When Harry Reid nixed that the Republicans dug in their heels and decided that there was a possibility that the savings in the Medicare proposal may not ever materialize killing that bill.
The new agreement which seems to have some support among both sides would use what has been termed a gimmick to offset the costs. The plan is to employ what has been called “pension smoothing,” which would allow companies to contribute less to their pension funds each year.
By allowing reduced payments to pension funds these companies would realize higher profits generating more tax revenue for the government — in the short term. In the long term this would actually lose revenue as the underfunded pension funds would have to be replenished at some point.
In other words Senate Republicans rejected the proposal from the Democrats because the savings from the Medicare sequestration may not materialize but are willing to consider a plan which guarantees that no savings will ever be realized.
The only reason that this plan seems to work is that the reduced revenue does not appear immediately but in the long run it will as demonstrated by this chart from the Committee for a Responsible Federal Budget (CRFB).
There is no guarantee that the bill will survive although it seems that there is some support among Republicans, some have said that they will support it but only if they are allowed to offer amendments to it.
“We want to take a look at the idea. We’re not rejecting it out of hands by any means,” said Senator Dean Heller (R-NV) who was the chief negotiator for Republicans in the talks.
“It represents progress if Republicans are going to be allowed the opportunity to offer amendments. That’s going to be the key issue,” said another Republican, Susan Collins of Maine.
On Wednesday, Harry Reid said that he was only one or two votes shy of the 60 needed to bring the bill to the floor for a vote expressing cautious optimism.
This bill is very important to the 1.6 million long-term unemployed workers who have been unemployed for more than 26 weeks and saw their benefit disappear after the extension expired in December. It is not their choice to be out of work and the bill don’t stop when they lose their jobs, nor do they have the option of not eating.
Using the “pension smoothing” plan is really nothing but smoke and mirrors, a gimmick allowing them to claim to be paying for this extension with offsets elsewhere when there will be no real savings although the CBO will score it as deficit neutral.
h/t: Business Insider