Here's How The Senate Killed The Latest Round Of Unemployment Insurance Negotiations

Harry Reid Mitch McConnellAPHarry Reid and Mitch McConnell both deserve blame.

When Republicans filibustered two pieces of legislation to extend emergency unemployment benefits yesterday, Democrats immediately pointed fingers at them for their obstruction.

For once though, the answer is more complicated than that.

Over the past five years, Senate Republicans have killed a number of Democratic bills without offering any alternatives. They shot down everything in President Obama’s jobs bill, but have yet to propose a real plan that would actually get Americans back to work. They filibustered all gun control legislation that had overwhelming support. They shut down the government with crazy demands and took us to the brink of default.

That is the typical Republican obstructionism that has plagued both houses of Congress and for which Republicans have rightly been criticised.

But the reason yesterday’s legislation failed is not because Republicans refused to offer an alternative or weren’t willing to negotiate. It was because both sides became preoccupied by politics and refused to put forward realistic solutions. They are both to blame.

Let’s walk through it.

Democrats initially wanted to extend unemployment benefits without a spending offset. On a policy basis, this is the best solution. The empirical evidence shows that the extended benefits have at most a minimal effect on employment and millions of people rely on them for basic household necessities. The government can borrow at a negative real interest rate and our deficit is falling at its fastest pace in decades. The best policy is to extend unemployment insurance and add the cost to the deficit.

But Republicans were never going to agree to this. They may be wrong, but a large percentage of the country agrees with them that the debt and deficit are a big problem. Given the fact that Republicans control the House and Senate Republicans have the power of the filibuster, no extension of unemployment benefits would pass without a spending offset.

Democrats have preached for years that we have a divided government and that requires compromise. Here, that meant Democrats would have to find a spending offset if they wanted to extend unemployment insurance.

That’s exactly what Senate Majority Leader Harry Reid (D-Nev.) did. He put together an amendment that extended unemployment benefits for 11 months and paid for it by extending the Medicare provider cuts by an additional year until 2024.

Republicans didn’t consider this a legitimate proposal. These cuts took place outside of the typical 10-year budget window that Congress uses – which is why the Congressional Budget Office (CBO) scored Reid’s amendment as a $US17 billion increase in the deficit. Republicans (and liberals) didn’t believe that these cuts would ever actually happen.

In response, they offered their own amendments to offset the cost. One such amendment – proposed by Sen. Kelly Ayotte (R-N.H.) – would require a social security number for families to collect the additional child tax credit (ACTC). The goal of this was to crack down on fraud perpetrated by undocumented immigrants in the ACTC which the Government Accountability Office (GAO) estimated cost the government $US4.2 billion in 2010.

But Democrats objected, arguing that Ayotte’s amendment would do more than just crack down on fraud; it would also hurt American-born children whose parents were undocumented and did not have a social security number to collect the credit.

This is where the negotiations fell apart and politics took over.

Senate Minority Leader Mitch McConnell (R-Ky.) proposed to pay for the extension by delaying the individual mandate. This was purely to get vulnerable red state Democrats to take a tough vote on the mandate. It was a political move.

Reid did not want to force his members to take a vote on the mandate if he wasn’t certain that it would lead to passage of a final bill. Since Republicans still had the right to filibuster the final legislation, allowing a vote on the individual mandate amendment was too big of a political risk.

But Reid faced intense criticism at the end of last week from Republicans and the media for not allowing any votes on amendments. He returned yesterday with a new deal: he would allow each side to propose five amendments that would need 60 votes to pass, but final passage would only require a majority. If agreed to, this would ensure that Democrats could pass the unemployment extension no matter what.

Senate Republicans rejected the proposal. They have no interest in giving up their right to filibuster.

Reid then brought up the original bill (the three-month extension without a spending offset) and his amendment (the 11-month extension with an offset) for a procedural vote. Republicans filibustered both, and that’s where we stand today.

Instead of negotiating over how to pay for the extension, the past week has been spent on arguing over Senate procedure and amendments. It’s been all politics.

Reid’s proposed spending offset was never going to be acceptable to Republicans, but he never came back with a second offer. The Ayotte amendment was not going to be agreed to, either, but McConnell immediately moved forward with an even more unacceptable amendment to delay the Affordable Care Act’s individual mandate.

Both sides saw chose to play politics and hammer each other instead of sitting down and finding a spending offset that was acceptable.

It’s easy to say that Republicans killed this deal, because they filibustered the bill. But that’s wrong. Democrats cannot expect to get everything they want in divided government, especially with the filibuster rule still in place. If they wanted to extend benefits, they have to offer a legitimate way to offset the cost, particularly if they want to get the legislation through the House. So far, they have not done so.

There’s plenty of blame to go around.

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