Budget Deal Hits New Snag as Both Sides Hunker Down Over Jobless Benefits

When Republicans tagged doctors’ payments onto the budget deal, they opened the door for Democrats to demand help for the unemployed. REUTERS/Kevin Lamarque

Update: The House passed the bipartisan budget agreement Thursday evening, 332-94. It now heads to the Senate for final passage. The House will recess without extending unemployment benefits for the long-term unemployed. 

The budget deal is done, right? Warring Democrats and Republicans, faced with another shutdown of the government, have finally seen sense. Each has given a little and taken a little. For once, moderation has won the day.

Not so fast.

On Wednesday afternoon, two Democratic lawmakers made a rare trip up to the third floor of the U.S. Capitol building, where reporters spend their days in a long room overlooking the House chamber. Representatives Sander Levin of Michigan and Chris Van Hollen of Maryland were on a mission, and they wanted to make their case directly to the press.

It’s about emergency unemployment benefits, which are set to expire for the long-term unemployed on December 28 unless Congress extends them. If the House does not act before Friday, 1.3 million Americans will find themselves without any income three days after Christmas. By June of next year, that number will hit 3.2 million.

As the holiday recess draws near, lawmakers are scrambling to pass the budget deal struck by House and Senate negotiators this week and tie up a few other loose ends, including a temporary extension of the Farm Bill and what is generally referred to as the “doc fix,” an uncontroversial measure to prevent Medicare reimbursements to physicians from shrinking by 20 percent. (Lawmakers often refer to this as SGR, which comes from the Sustainable Growth Rate formula used to calculate reimbursements.) Both parties want to protect doctors from losing income.

But in a surprise move on Wednesday, even though the doc fix was not part of the budget agreement, Republicans in the House Rules Committee, which prepares legislation for a floor vote, attached a temporary, three-month doc fix to the upcoming vote on a bipartisan budget deal.

Democrats pushed back. If Republicans can vote to maintain doctors’ payments along with the budget, then surely they can vote to extend unemployment benefits for the 1.3 million uninsured, they argued. Levin and Van Hollen asked the Rules Committee to include in the vote a three-month extension of unemployment compensation. The Republican-run rules committee balked.

With the press huddled round, Van Hollen spoke first. “Right now in the Rules Committee, they’re going to adopt a rule that essentially merges the SGR fix for a three-month period into the budget agreement,” he said, stressing that a doc fix and unemployment were both specifically not part of the budget deal reached this week between the House and the Senate. “We support the doc fix, but my goodness, it would be unconscionable to not allow the House to also have a vote on extending unemployment compensation for three months at the same time.”

“It’s an appeal to the conscience of this institution,” Levin added. “Are we going to leave here saying, ‘We’ll reimburse physicians and absolutely cut off any continued help to people looking for a job who have been laid off through no fault of their own.’?”

But to Levin and Van Hollen, it’s far more than an issue of conscience. The two Democrats warned that the situation threatened the passage of the budget deal altogether, which will rely on Democratic votes to pass the House. “This does now add a new dynamic that could upset the applecart, put at risk the budget agreement,” Van Hollen warned.

One floor below the press gallery, Representative Pete Sessions, R-Texas, who chairs the Rules Committee responsible for merging the budget and doc fix votes, seemed off guard and displeased with this new twist on the budget talks.

“I do not go and negotiate deals,” Sessions told a throng of reporters, stressing that his job is just to get deals to the floor once they are made.

Sessions explained, step by step, what happened in the Rules Committee when Levin and Van Hollen pushed for a vote on unemployment benefits.

“I excused myself as chair [of the committee] for a few minutes and I went down and spoke to the speaker, to make sure I was not missing a piece, whether it was a part of an active discussion or resolution,” Sessions said.

“I went upstairs and said, ‘I asked the speaker if I was missing something, if there was this negotiated settlement that was underway,’ and told Mr. Levin and told Mr. Van Hollen that there was not a negotiated settlement that was imminent, and so I was not including it into the package.”

In other words, Sessions wasn’t including unemployment benefits in the vote because he didn’t have the go-ahead from Republican leadership. A final agreement on how to proceed did not exist.

“Does it look like doctors get theirs, the Farm Bill gets theirs, the budget deal gets done, and unemployed people are left out in the cold here?” one reporter asked Sessions.

He disagreed. “You know what it looks like to me? It looks like [Senate Majority Leader Harry] Reid, the White House and Speaker Boehner have not entered final negotiations or come to an agreement,” he replied. “That is up to them to go do. And I will take things that are final agreements.”

The question of how to pay for the unemployment benefits is the sticking point here. Republicans will only extend jobless benefits if the cost of doing so is offset somewhere else in the budget. Levin and Van Hollen are proposing to use savings found in the new Farm Bill being negotiated between the House and Senate and expected to come to a vote in January.

The problem is, that bill hasn’t passed yet, so the savings don’t technically exist for a vote today and Republicans have been dismissive of the proposal. Of course, that’s cold comfort to someone who has been unemployed for six months and is facing a new level of impoverished uncertainty in two weeks’ time.

“We have a specific proposal as to how to finance it,” Levin assured reporters, referring to the Farm Bill plan. “But the main point is that if the speaker doesn’t like this offset, he should work with us to find another one.”

“It’s pretty clear Republicans don’t want to extend unemployment benefits,” said Levin spokesman Josh Drobnyk.“If they did, they’d bring up a bill.”

With the House set to vote on the budget deal Thursday that now includes the doc fix provision, the clock is ticking to reach an agreement on unemployment insurance. Democrats seem to know that the budget is their last real point of leverage on the issue, and it won’t be long before it’s clear whether the budget is really in jeopardy.

“This is an immediate crisis for these families,” said Levin, who has led the charge to extend unemployment benefits. “So it has to be an immediate crisis for this institution.”