Massive extenders bill fails in the Senate
by AccountingWEB on
The $141 billion spending bill casually dubbed the extenders bill failed in the Senate yesterday. Forty-five Senators voted for it, fifty-two against.
With a Senate chock full of Democrats, this might have been an easy victory for them. But more and more lawmakers seem to be aware of the recent backlash from the voters when it comes to spending.
The bill’s author was Senate Finance Chairman Max Baucus (D-Mont.). He believes the proposal would be good for creating jobs. However, members from both parties who are more fiscally conservative were not comfortable supporting a law that would add approximately $80 billion to the federal deficit. Baucus likely will propose a version of the bill with a somewhat smaller price tag.
During the morning vote, Judd Gregg (R-N.H.), ranking member of the Senate Budget Committee, brought up the controversial cost of the bill. When the vote failed, Democrats withdrew it from consideration.
This proposal had a great deal of opposition, including from the American Institute of CPAs and the National Society of Accountants. They sent letters to Baucus and other senators asking them not to pass legislation that would target S-corporation partners.
Senator John Thune (R-S.D.) has offered an alternative which he says is fully paid for and would reduce the deficit by $55 billion. "My amendment would eliminate harmful tax increases and wasteful spending included in the Democrats' bill," he said in a statement.
Thune’s version would eliminate aid to the states, in the amount of $24 billion, and it would drop many of the tax increases that have stirred up controversy. In addition, Thune’s bill would impose a 5 percent cut in government spending across the board for most government agencies, except the Department of Defense and the Department of Veterans Affairs). Federal employees, it seems, are especially in the crosshairs with this version. If it passes, this bill will, among other things, seek to limit the number of federal employees, freeze their wages, and collect unpaid taxes owed by them.
In response to Thune’s proposed amendment, Baucus said, "I support finding ways to make our government more efficient, but these cuts are arbitrary. They are inappropriately restrictive."
Baucus along with Senate Majority Leader Harry Reid (D-Nev.) likely will come out with a skinnier version of the original bill. Among the items that could be cut from the slimmed-down bill are a proposed increase in unemployment benefits of $25 per week, and a plan to revise the way doctors are paid through Medicare.