Despite focus on oil, Democrats struggle to pass huge spending bills

Jon Ward Contributor
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With the nation focused on the spill in the Gulf and hearings with oil executives this week, Democrats in Congress have a tiny amount of breathing room to try to move two enormous spending bills through.

However, Republicans say the votes are still not there for Senate Majority Leader Harry Reid, a sign of the growing public discomfort with exploding budget deficits and national debt. A Reid spokesman blamed Republican obstruction, though it is not at all clear that all 57 Democrats and the two Independents who caucus with the Democrats are currently on board.

Reid, a Nevada Democrat, moved Monday to end debate on a $115 billion grab bag of extensions on unemployment insurance, Medicaid assistance to states, payouts to physicians who take Medicare patients, tax exemptions for certain industries, as well as a series of new taxes on corporations and investors.

This legislation, which would increase the budget deficit by about $79 billion, has been batted around Congress since March, with lawmakers passing short-term extensions in the interim. The House passed a scaled down version late last month that has since been beefed back up by the Senate. Republicans have pushed Democrats to pay for the spending with money from the $862 billion stimulus bill, an idea that has gained traction but continues to be resisted by Reid, a Nevada Democrat.

Democrats aim to pass the “extenders package” this week. But another huge spending battle awaits over $50 billion split between money for state education systems and money to spur community banks to increase lending to small businesses. President Obama pressed congressional leaders in a letter Saturday to pass this spending without paying for it, promising to address the $1.3 trillion deficit and $13 trillion national debt.

Despite the fact that the national spotlight has moved for the moment off of the Senate’s deliberations and on to the oil fiasco — which has taken center stage this week largely due to hearings with executives Tuesday and Wednesday as well as Obama’s two-day trip to the region and Oval Office address to the nation Tuesday night – Reid is still searching for ways to pass the extenders package.

“He doesn’t have 60 (deficits matter again). He’ll need spending cuts and deficit reduction to lubricate votes, not oil,” said a senior Senate Republican leadership aide.

Kyle Downey, a spokesman for Sen. John Thune, South Dakota Republican, said that “not even the failed government response in the Gulf can distract the American people from a massive tax hike.”

The extreme difficulty that has beset Democrats in trying to push through spending packages is evidence of the unease with which many Democrats now, particularly in the House, are looking ahead to fall elections and an electorate furious about government spending that they believe is out of control.

House Majority Leader Steny Hoyer on Sunday complained of “spending fatigue.” House Speaker Nancy Pelosi, California Democrat, said on a conference call with liberal bloggers earlier this month: “There’s a changed climate in terms of the size of the spending and investment packages we’re putting forth.”

Beyond the extenders bill, Republicans have made clear that they are steadfastly opposed to the $23 billion in extra money to help stave off layoffs of state government employees, calling it a payoff for unions.

“Education funding has not been neglected during the recession,” said Sen. John Kyl, Arizona Republican, pointing out that the $862 billion stimulus already included $100 billion for school systems and that education has doubled as a percentage of the federal budget since 2000, to 15 percent of all spending.

Additionally, the president’s proposed budget for the fiscal year 2011 includes a nine percent increase in education funding.

Kyl said the education spending was less about teachers and students and more about a pattern of giving preferential treatment to one of the president’s most powerful and influential interest groups: organized labor.

“They were the beneficiaries of $85 billion in bailouts to the car companies. And special treatment of the president’s health spending law,” Kyl said. “Teachers unions are the winners if the president convinces Congress to spend another $23 billion on teacher’s salaries.”

“At some point local governments have to figure out a way to make due with what they have,” he said.

Democrats say that the $23 billion for schools will save 300,000 teacher jobs from being eliminated. But that number comes from congressional testimony by Secretary of Education Arne Duncan in April, where he said the number is actually somewhere between 100,000 and 300,000.

“While there is no hard number for the whole country, we think state budget cuts could imperil anywhere from 100,000 to 300,000 education jobs,” Duncan told the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education.

This estimate has come under criticism from conservative groups such as the American Enterprise Institute as well as the Washington Post editorial board.

Republicans have proposed alternative versions of the extenders bill that would pay for it with unused stimulus funds. About half of the $862 billion has been spent, leaving about $421 billion still in the pot.

Hoyer, Maryland Democrat, on Sunday expressed support for such an idea.

“I have asked the White House to look at the package that we — the Recovery and Reinvestment Act that we passed, approximately $800-plus billion,” Hoyer said. “There are clearly funds in there that have not been expended to see whether or not there are some available for this more immediate priority than some that may not be quite as immediate.”

A Reid spokesman, however, told The Daily Caller by e-mail Monday that the majority leader remains opposed to this idea. When asked in a follow up e-mail why Reid opposes this solution, the spokesman did not respond.

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