By Vicki Needham, Mike Lillis and Russell Berman - 01/07/14 06:00 AM EST
The Senate will hold a key procedural vote Tuesday on extending federal benefits to the unemployed for three months, an issue the White House hopes to use to change the subject from ObamaCare.
The vote to begin debate on the measure is expected to fail, as it appears Democrats will fall short of the 60 votes necessary to proceed because of GOP demands that the bill’s $6.4 billion cost be offset with other spending cuts.
Yet while that failure would initially be a setback for Democrats, it also gives them an extended avenue to focus their messaging on income inequality — and not ObamaCare — ahead of this year’s midterm elections.
Democrats want to change the subject in 2014 as much as possible from the healthcare reform law, which dominated politics in the last two months of 2013. They believe that by turning the political discussion to extending federal benefits for the unemployed and raising the minimum wage, they can boost their party’s chances of holding the Senate in a difficult midterm election.
President Obama on Tuesday will hold a White House event with some of the estimated 1.3 million unemployed people who have lost their federal benefits since the program expired last month.
House Republicans have said they want to spend most of the month on repealing ObamaCare, and a prolonged fight over a short-term extension of jobless benefits would distract from that focus.
The procedural vote on the three-month bill had been scheduled for Monday evening, but was postponed until 10:30 Tuesday morning after a number of senators missed a vote to confirm Janet Yellen as chairman of the Federal Reserve.
The polar vortex that pushed Arctic temperatures to the Midwest was blamed for the flight delays, though Sen. John Cornyn (R-Texas) accused Democrats of pulling a political stunt.
There are signs that Republicans will agree to extend the benefits if their cost is offset — though finding an agreement on those cuts could be difficult.
Sen. Susan Collins (R-Maine) said Monday that she spoke to the president about possible offsets and, along with Sen. Lisa Murkowski (R-Alaska), signaled support to move forward on the bill.
Before the holidays, Speaker John Boehner (R-Ohio) said he told White House chief of staff Denis McDonough that the House would consider a proposal to extend long-term unemployment insurance if it was paid for and included a couple of the GOP’s other job-creation measures. Boehner did not offer specifics, but the Republicans’ economic agenda has focused on approval of the Keystone XL oil pipeline, the elimination of energy regulations and an overhaul of federal job-training programs.
Democrats have previously suggested a willingness to pay for the program.
Last month, Reps. Sandy Levin (D-Mich.), the ranking member of the Ways and Means Committee, and Chris Van Hollen (Md.), senior Democrat on the Budget panel, suggested the cost of a three-month extension could be offset by cutting farm subsidies over the next decade.
But Boehner rejected that proposal, and it never got a vote on the House floor.
Since then, the Democrats have shifted their message, abandoning their calls to pay for the three-month unemployment extension and arguing instead that the emergency nature of the benefits justifies the increase in deficit spending.
It’s unclear if party leaders will reverse course once more and offer their offset proposal — or an alternative pay-for — as the debate evolves.
House Democratic Whip Steny Hoyer (Md.) last week said that finding spending cuts in other programs is a difficult issue, and that lawmakers need to be cautious about taking money from one group to help another without damaging the economic recovery.
Boehner spokesman Michael Steel said Monday he was “not aware” of any calls between Obama and the Speaker on paying for the benefits since Boehner’s December comments.
Mark Zandi, chief economist with Moody’s Analytics, said that the program should be extended to provide additional stimulus for the economy.
“While it would be ideal if it is paid for, paying for it shouldn’t be a necessary condition to extend it,” he said.
Gene Sperling, head of the National Economic Council, said Monday that the program should remain in place until the jobless rate drops to 6 percent, even as the economy improves.
The national unemployment rate in December was 7 percent.
The next jobs report is due out on Friday and, if the figures are good, it could further boost Republican arguments that the program is no longer needed.
But Democrats and program advocates off Capitol Hill argue that 37 percent of the unemployed have been out of work for an average of 37 weeks. Those are the people who are helped by the federal benefits, which set in after state benefits expire.
Zandi argues that failing to extend the program won’t undermine the economic recovery, “but it will hurt, especially in the hardest pressed regions of the country.”
The program is designed to wind down in states as their unemployment rates drop.
But while Democrats could eventually get the short-term extension as Republicans look to shift the debate back to ObamaCare, it might be the last gasp for the emergency benefits.
If the three-month proposal gets through Congress, at least one Democratic source said that there won’t be much leverage to continue the program for the rest of the year, as Democrats have wanted, especially with the difficulty of finding offsets.