By Corey Boles and Martin Vaughan
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–Senate Democrats suffered a blow Wednesday in an attempt to conclude debate on a sweeping bill that would extend a range of popular tax credits, renew several expired federal programs and provide financial aid to states.
In a defeat that saw Democrats abandoned by moderate lawmakers on both sides of the aisle concerned over the cost of the $140 billion measure, Senate leaders will now be forced to go back to the drawing board to devise a way to get a pared down bill through the Senate.
Around $85 billion of the cost of the legislation is not paid for by savings elsewhere in the federal budget.
The bill would extend tax credits for businesses including a measure providing breaks for spending on research, and for individuals such as a credit against income taxes paid to states.
It would continue federal jobless benefits through November, and provide $24 billion in financial aid to states struggling with the rising costs of Medicaid.
A scheduled reduction in payments to doctors who treat Medicare patients for 19 months was also part of the package.
The legislation would have raised taxes on oil companies, financial firms and U.S. multinationals in order to pay for part of its cost.
Democratic aides indicated that Senate Finance Committee Chairman Max Baucus (D., Mt.) was already working on a less costly version of the legislation, although details weren’t immediately available.
One possibility that is being considered is the 19-month deferral of the payment reductions to doctors is shortened.
The outcome of the vote wasn’t really in doubt as several moderate members of both parties had indicated in recent days their planned opposition to the legislation in its current form.
Wednesday’s vote wasn’t on the underlying bill itself, but rather on whether or not to waive part of the Senate’s spending rules for the legislation. This allowed Democrats to test the waters to see what level of support there was among lawmakers for the bill without suffering a defeat on the measure itself.
Democrats needed 60 votes to win the vote. In the end they only received 45, with 12 Democrats voting against their party.
Republicans have offered up their own version of the legislation that would strip out the fiscal aid to states, and introduce broad budgetary cuts to most federal agencies.
Rather than add to the deficit, it would reduce the deficit by $55 billion over the next decade.
Aides of both parties indicated there would likely be a vote on the measure at some stage.
Wednesday’s vote is just the latest in the continuing saga of lawmakers trying to complete the legislation. The Senate initially passed a version of the bill in mid-April, but it then got held up in protracted discussions between House and Senate lawmakers.
The House then moved forward with a version of the bill, narrowly approving it last month. The Senate then amended that bill again, which is the current bill being considered.
All this back and forth means that whenever the Senate does pass a bill, it would then have to go back to the House yet again, further delaying its final passage.
-By Corey Boles and Martin Vaughan, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com
