Senate Democrats reject elimination of unemployment benefits for millionaires

Jon Ward Contributor
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Senate Democrats on Wednesday defeated an amendment to pay for the $60 billion in unemployment insurance payments that were included in President Obama’s tax deal with Republicans, which included a provision that would have eliminated taxpayer-funded benefits for millionaires.

A total of 50 Democrats and two independents voted against the measure, sponsored by  Sen. Tom Coburn, to cut a total of $156 billion in spending over five years.

There were five Democrats who voted for the measure, along with all 42 Republicans. The Democrats were Sen. Evan Bayh of Indiana, Sen. Kay Hagan of North Carolina, Sen. Blanche Lincoln of Arkansas, Sen. Claire McCaskill of Missouri, and Sen. Jon Tester of Montana.

Conservative Senate Republican staffers said they were surprised that the measure attracted as much support as it did.

The cuts were offered by Coburn, an Oklahoma Republican, as the way to pay for the $60 billion in new unemployment insurance spending authorized by the provision of the tax deal passed later in the day by the Senate to extend the current tax rates for two years.

Coburn later was one of four Republicans who voted against the tax deal, which passed the Senate 81 to 19.

The actual amount that would have been saved by ending unemployment benefits to millionaires – about $100 million over five years according to Coburn’s staff – was small in the context of the federal budget, but nonetheless symbolic.

“As many as 2,840 households that reported income of $1 million or more on their tax returns were paid a total of $18.6 million in unemployment benefits in 2008, according to the U.S. Internal Revenue Service,” read a document prepared by Coburn staff, citing a report by Bloomberg News in October. “This included more than 800 earning over $2 million and 17 with incomes exceeding $10 million. In all, multimillionaires were paid $5.2 million in jobless benefits.”

“This amendment would stop payments to individuals with assets of $1 million or more and those earning at least $1 million.”

Other cuts offered by Coburn included 24 different ideas included in the report released this month by President Obama’s deficit commission. Among them:

  • a 15 percent cut in the budgets for the White House and congressional offices, saving $3.8 billion over five years
  • a three-year pay freeze for members of Congress, saving $6 million over five years
  • a 10 percent reduction of the federal workforce, saving $13.2 billion over five years
  • a 20 percent reduction in the federal motor vehicle fleet, saving $1.5 billion over five years
  • a 10 percent reduction in voluntary additional payments to the United Nations, saving $1.5 billion over five years
  • a 15 percent reduction in Defense Department procurement, saving $61.4 billion over five years

Coburn said in a floor speech before the vote that Americans would be watching to see if Congress paid for the new spending in the tax deal.

“They’re going to be saying, ‘Does the Senate get it?'” he said. “You can’t say you recognize the significant difficulty our country is in, and turn around and vote against somebody making an effort to get us out of that jam and not offer other additional spending cuts.”

The addition of new spending without paying for it is one of the most objectionable portions of the tax package for many Republicans, who nonetheless voted for it in the Senate and are largely in favor in the House, where a final vote is expected Thursday.

Tea Party activists said there is growing anger among the grassroots over the tax deal, which is preventing tax rates from going up on incomes and estates.

“I have received many reports that the grassroots are getting busy signals at the offices when they call,” said Mark Meckler, with the Tea Party Patriots. “The heat is on, but I think that the current Republican leadership just doesn’t care.”

“We are watching closely. And in the spirit of the season, we are making a list and checking it twice. In November 2012, we’ll remember who was naughty or nice,” Meckler said. “They can support the pork and the compromise, but come election time they will pay the price.”

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