Senate Democrats have been having a devil of a time this week drumming up votes to pass their version of a tax extenders package that extends unemployment benefits, vital social safety net programs, and a handful of popular tax credits and infrastructure programs. Deficit hysteria has led the entire Republican caucus, as well as some Democrats like Sen. Ben Nelson (D-NE), to oppose the package, despite the fact that unemployment is at 9.7 percent and 46 percent of the unemployed have been out of work for six months or more.
The House has already passed its extenders package, but due to consternation from Blue Dogs about the cost, critical funding for Medicaid as well as COBRA subsidies to help laid off workers purchase health insurance were cast aside. But those unfortunate decisions to cut critical funding look like child’s play next to the version of the bill that Senate Republicans unveiled today:
The GOP bill drops provisions in the Democrats’ proposal such as $24 billion for state Medicaid funds, $4 billion to extend Build America Bonds, $2.5 billion for state Temporary Assistance for Needy Families budgets; agriculture disaster assistance and settlement funds for Native American and black farmers.
To sum it up, to Senate Republicans Medicaid, a successful bond program that helps states and localities build infrastructure, and assistance to aid needy families in finding jobs and weathering the Great Recession are all expendable. And at the same time, the GOP bill drops several revenue raisers, including those that close tax loopholes for multinational corporations and wealthy hedge fund and private equity managers.
These loopholes allow multinational corporations to claim U.S. tax credits on earnings that they keep overseas and help hedge fund managers to pay the much lower capital gains rate on income that they receive, even though it is exactly like any other salary or hourly wage. These are loopholes that only help to further enrich the already rich and have no business being in the tax code — but Republicans (and some Democrats) keeping fighting to preserve them.
As I’ve pointed out before, with the labor market as weak as it is, it is highly appropriate to deficit spend and concerns over the short-term deficit (not to be confused with the long-term, structural deficit) should be secondary to job creation. As AFL-CIO President Richard Trumka told me this week, “we do not have a short-term deficit crisis, we have a short-term jobs crisis in this country.”
With their bill, Republicans have coupled stunning indifference to putting people back to work with the preservation of unnecessary corporate welfare. It’s a very blatant pronunciation of priorities. (The bill does include $1 billion to help fund a summer youth employment program. So that’s something, I guess.)