Those same House-Senate talks will give the administration an opening to exert itself more directly than it has up to this stage. But so many changes have now been made to the initial House bill that the conference will almost surely run past Obama’s Feb. 14th deadline and into the Presidents' Day recess.
Speaker Nancy Pelosi has vowed there will be no holiday until the bill is done. And at a party retreat in Virginia Saturday, the California Democrat sought to tamp down criticism from her caucus about the concessions made in the Senate talks.
“Respect the bill for what it does, don’t judge it for what you wish it did,” she said, according to a leadership aide. Nonetheless, her home state has huge issues with how the Senate would distribute new Medicaid funds, and the reduced level of state aid is a flashpoint for many governors struggling with budget deficits.
The first Senate test Monday evening will come on a cloture petition to cut off debate on the revisions negotiated Friday — revisions that cut about $108 billion from the total cost of the package. The second challenge would follow on mid-day Tuesday when 60 votes will be needed again to waive budget points of order and complete passage.
The administration is betting on at least three Republican moderates to help see it through, and the traditionally Republican-leaning business lobby is beginning to exert itself more as well.
In announcing his support Friday night, Sen. Arlen Specter (R-Pa.) pointedly read from a Chamber of Commerce endorsement. The National Association of Manufacturers has also weighed in, telling Republicans that votes on the bill “including potential procedural motions” may be considered for designation as key votes in NAM’s scoring of their legislative record.
Coming in at noon, the Senate held a rare Saturday session to set this process in motion.
As it worked out, Democrats needed all day—and a big chunk of the night—-just to finish assembling the papers to implement Friday’s agreement. The final package, filling 778 pages, was not filed until near 10 p.m. Saturday, and Majority Leader Harry Reid (D., Nev.) broke the silence by filing cloture an hour later.
Reid thanked Sen. Jon Tester (D., Mont.), who sat in the chair for hours waiting, for being on hand to “get the wheels finally moving.”
The text before the Senate now is essentially a complete substitute for the initial Senate bill, wrapping together the agreement Friday and all the amendments previously adopted on the Senate floor. Among these is a $15,000 homebuyer’s tax credit, which has since been estimated to cost much more than first advertised. But no changes were made in this section, though the question is sure to be revisited in talks with the House.
As for the bill itself, it's now clearer that the overwhelming share of the $108 billion in reductions would come from the spending side of the ledger. The end result is a bill about the same size as the nearly $820 billion House package but tilted far more toward tax reductions, which would be more than 40% of the total.
Discretionary funds governed by the Senate Appropriations Committee are cut by about $83 billion, a 23 percent reduction that includes a $40 billion cut from a state fiscal stabilization program and the virtual elimination of a $19.5 billion public school and higher education construction program opposed by Republicans.
One of the last decisions was to strike $5.8 billion in public health funds to fight preventable diseases. Sen. Susan Collins (R-Maine) was the driving force in making this cut, but elsewhere, she was also a force in adding $870 mllion for community health centers.
Within the Senate Finance Committee, about $7 billion in savings would be achieved from spending programs and $18 billion from tax changes.
The savings include $2 billion from the president’s health information technology initiative. Another $5 billion would be achieved by scaling back subsidies promised under a new initiative to help workers maintain their employer-provided health insurance when cut from company payrolls.
Among the modifications to tax provisions, the single largest relates to the treatment of low-income housing tax credits. But politically, the two more sensitive issues relate to income rules applying to the refundable child tax credit and Obama’s signature “Making Work Pay” payroll tax credit, worth $500 per individual and up to $1000 for families.
In each case, the revisions dial back eligibility to save a total of $5 billion altogether. The payroll tax credit would begin to phase out when a worker’s adjusted gross income exceeds $70,000, compared to $75,000. In the case of the refundable child tax credit, a worker would become eligible only when his or her wages exceed $8,100, $2,100 higher than the initial Senate bill and far above the House version.