Senate fails to pass 'extenders' bill, state Medicaid funding

After a bill to extend jobs and economic relief programs failed for the third time in the Senate Thursday, Majority Leader Harry Reid announced he would withdraw the bill, Politico reports. The legislation included financial relief for states, including billions to support Medicaid programs. "Despite major concessions, GOP moderates refused to cross the aisle. ... In the course of these talks, the size of the package was cut in half, and, to reduce the impact on the deficit, Democrats even went so far as to pay for state Medicaid assistance by cutting about $10 billion from future food-stamp benefits" (Rogers, 6/24).

The state aid package totaled $16 billion, and it was unclear whether the Senate would address it or other provisions separately, the Los Angeles Times reports. "California and dozens of other states are hoping for federal aid to help balance their budgets." The latest version of the bill would have added $30 billion to the national debt (Hook and Levey, 6/25).

Reid "blamed Republican intransigence for killing the measure and dismissed talk of continuing negotiations, saying the only path forward would require Republican compromise," The Washington Post reports. "We've tried and tried. This is our eighth week on this legislation," he said. Republican Minority Leader Mitch McConnell, R-Ky., countered, "The principle Democrats are defending is that they will not pass a bill unless it adds to the debt" (Montgomery, 6/25).

House Speaker Nancy Pelosi, D-Calif., "ripped Senate Republicans" for blocking the jobs legislation, Politico reported in a second article. "What did middle-class families ever do to Republicans in the Senate that they would snuff out every opportunity for job creation that has been sent to them?" Her "comments are only the latest sign of tension between the House and the Senate over the Democrats' stalled economic agenda (Aujla, 6/24).

The Hill: "Pelosi's frustration has been on the rise lately. She was forced to scale back a package of unemployment insurance extensions, aid to states and extended COBRA health insurance benefits in part because her vulnerable members did not want to vote to add to the deficit without an assurance that the Senate would follow suit" (Allen, 6/24).

In a second article, The Hill reports that "Olympia Snowe (R-Maine), whom Democrats had been aggressively courting as a key vote to get the tax extenders passed … said she'd vote no on the bill. … Snowe expressed her frustration she'd had a small business tax relief package since March and has been repeatedly promised action was forthcoming. And she said the Medicare payroll tax in the healthcare reform law should have been used to give physicians a payment update for 10 years or more" (Pecquet, 6/24).

Meanwhile, states such as Massachusetts have counted on the Medicaid money for use in their upcoming budgets. The (Attleboro, Mass.) Sun Chronicle reports that the "Massachusetts House and Senate had previously passed budgets based on the belief that Washington would be forthcoming with $700 million in aid to help pay for Medicaid. The extra Medicaid money would have freed up state funds for other budget purposes" (Hand, 6/25).