June 25 (Bloomberg) -- Senate Republicans yesterday killed a bill to extend unemployment benefits, provide aid to state governments and raise taxes on buyout fund managers, saying the measure would add too much to the federal deficit.
Lawmakers voted 57-41 in favor of the measure, with 60 votes needed to advance it. Democrats repeatedly cut the bill in an effort to win backing from those who objected to its cost. The latest version would have added $33 billion to the budget shortfall, a fraction of previous proposals; Republicans said the cost-cutting didn’t go far enough.
No Republican senators backed the measure; Senator Ben Nelson of Nebraska was the only Democrat to vote against it.
Senate Majority Leader Harry Reid said that although lawmakers will move on other matters, the chamber may revisit the legislation -- central to the Democrats’ job agenda in an election year -- if Republican support emerges. Democrats control the Senate with 59 votes.
“We can’t pass it unless we get some Republicans” so “it’s up to them,” Reid, a Nevada Democrat, told reporters. “We have done everything that we could do to try to get the Republican votes.”
Senate Minority Leader Mitch McConnell, a Kentucky Republican, said “Democrats simply refuse to pass a bill that doesn’t add to the debt. That’s the principle that we’re really fighting for in this debate.”
The impasse means unemployment benefits will be cut off to more than 1 million people by the end of this week, according to the U.S. Labor Department.
White House press secretary Robert Gibbs said in a statement that Senate Republicans “obstructed a common-sense package that would save jobs, extend tax cuts for businesses and provide relief for American families who have suffered through the worst economic downfall since the Great Depression, even after Democrats offered multiple compromises” to gain backing for the bill.
The House yesterday approved on a 417-1 vote a separate Senate-passed measure postponing a 21 percent cut in Medicare payments to doctors until December. That provision was also part of the larger Senate bill.
Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said he didn’t know if lawmakers would try to pass an unemployment benefit extension as a separate measure. The bill derailed yesterday would have continued some extended jobless benefits through November.
“We’ll have to take stock and see,” Baucus said. “I hope frankly that enough people in the country realize what’s going on here and call members of the Senate on the Republican side and say, ‘Hey, we need some help here.’”
The legislation would have provided $16 billion in aid to states and raised taxes on the share of profits paid to executives of buyout firms. Robert Stewart, a spokesman for the Washington-based Private Equity Council, declined to comment on the vote.
The bill would have extended municipal bond subsidies, increased taxes on oil companies and extended a deadline to close home purchases under the government’s first-time homebuyer tax credit plan.
The measure also would have revived some business tax breaks that expired Dec. 31. They include a widely used research credit, and a tax break on income from some overseas financial services used by companies such as General Electric Co. Some tax benefits for individuals also have lapsed, including deductions for sales tax payments, teacher-paid classroom supplies and subsidies for college tuition.
The legislation’s failure is a win for U.S.-based multinational companies such as International Business Machines Corp., which lobbied against proposals to increase taxes on their international operations.
President Barack Obama earlier this month had urged lawmakers to approve $50 billion in aid to states to help prevent layoffs. Economist Mark Zandi has projected that without additional aid states will have to fire 300,000 employees.
Lawmakers worked on the bill for more than a month. An initial draft had been projected to add more than $130 billion to the deficit.
Senator Susan Collins, a Maine Republican whose support Democrats had sought, said after yesterday’s vote that the bill “is too expensive and I simply could not support it.”
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