Three Republicans vote yes, 19 Democrats vote no in a 237-192 tally.

The apocalyptic prediction Wednesday by the Congressional Budget Office that the budget is on a unsustainable course have some on Capitol Hill wondering if an extension of the middle-class tax cuts enacted by President George W. Bush is fiscally prudent. 

The House and Senate appeared set Wednesday to leave Washington for a weeklong recess without extending unemployment benefits. 

Sen. George Voinovich (R-Ohio) on Wednesday urged Senate Majority Leader Harry Reid (D-Nev.) to offset at least half the cost of extending unemployment benefits by using unspent stimulus funds, but Reid refused. 

"He flatly rejected this request even though Democratic leadership was going to take $10 billion from the stimulus to help pay for business tax breaks just last week," Voinovich said in prepared remarks. "My concern is that Democrats are more interested in having this issue to demagogue for political gamesmanship than they are in simply passing the benefits extension. I came to the table with a fair compromise and the ball is in their court." 

Investment advisers who make political contributions to gain pension business will be restricted from managing funds in an effort to curb abuses in the municipal securities market. 

The Securities and Exchange Commission on Wednesday voted unanimously to restrict "pay-to-play" practices of making campaign contributions to elected officials to influence the awarding of contracts for the management of the $2.6 trillion public pension fund industry. 

The rule, approved 5-0, bars investment managers who make political contributions from managing those funds for two years.

"The selection of investment advisers to manage public plans should be based on the best interests of the plans and their beneficiaries, not kickbacks and favors," said SEC Chairman Mary Schapiro. "These new rules will help level the playing field, allowing advisers of all sizes to compete for government contracts based on investment skill and quality of service."

Former AIG executive Joseph Cassano came under fire Wednesday from the Financial Crisis Inquiry Commission over the end of his time at the bailed-out company. 

Cassano made his first public comments over two years after he was forced to resign over the company's failure, which triggered the 2008 financial crisis. 

The former head of the financial products division is blamed by many for the proliferation of credit default swaps, insurance-like instruments sold to large financial firms that eventually caused the company's liquidity crisis. 

The commission's vice chairman, former Rep. Bill Thomas (R-Calif.) asked Cassano about the circumstances of his ouster. 

After probing the matter, Cassano asked Thomas "Are you asking why I left?" The commissioner responded "I don't think I'm supposed to but I am pondering it." 

Cassano said that former AIG CEO Martin Sullivan asked him to leave the company over a change in direction. 

"Look I was at the -- after the material-weakness finding ... Mr. Sullivan asked me to come and see him," he said. "He told me that changes were going to be made. He didn't think that I would like the changes that were going to be made and he suggested that I retire. And I agreed to it."

Senate Finance Committee Chairman Max Baucus (D-Mont.) on Wednesday said he is probing the tax practices of Transocean Ltd., the world’s largest offshore drilling contractor and owner of the Deepwater Horizon rig that exploded in the Gulf of Mexico.

The April 20 explosion of the rig, which oil giant BP had leased for a deepwater drilling project, killed 11 workers and touched off the largest oil spill in U.S. history.

The probe will explore the company’s decision to move its headquarters outside the United States.

“This investigation will examine whether Transocean has exploited current U.S. tax law by moving its headquarters overseas and help us determine what more can be done to protect American taxpayers from companies who avoid paying their fair share,” Baucus said in a statement Wednesday.

The former executive said decisions after his tenure led to the company's problems.

House Democrats will try to use money from their $862 billion stimulus to help pay for education spending in a supplemental appropriations bill.

The package crafted by House Appropriations Chairman David Obey (D-Wis.) would include $10 billion to help states and local governments avoid teacher layoffs, $5 billion for Pell Grant funding and $701 million to increase security at the Mexican border.