Reid hopes to unify Democrats in fight over jobs legislation

Senate Majority Leader Harry Reid must bridge divisions among Democratic senators when they gather Thursday to discuss jobs legislation.

Reid (D-Nev.) and other Democratic leaders are on the cusp of striking a deal with Republicans, but the agreement has come with a political price.

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To entice GOP votes, Reid and Senate Finance Committee Chairman Max Baucus (D-Mont.) have built the package around a core of tax cuts: a credit for employers who hire new workers; and a bundle of business-targeted tax relief provisions, such as the research and development tax credit.

The wooing of Republicans has drawn criticism from liberal senators, as well as union officials and left-leaning advocacy groups. The effort is similar to when Democrats last year included tax cuts in the $787 billion stimulus and drew support from only three GOP senators — one of whom is now a Democrat — and no Republican House members.

And uncertainty over the exact make-up of the package and a lingering distrust of Baucus has only fueled liberal discontent.

The tax proposals would be added to the broader jobs package that includes an extension of unemployment insurance and subsidies for COBRA health insurance premiums, as well as a freeze in scheduled cuts to doctors’ Medicare reimbursements.

It also includes provisions enabling small businesses to write off the cost of major investments, an extension of the Surface Transportation Act, and Build America Bonds, which would allow state and local governments to lower their borrowing costs.

Senate Republican aides say there is no final deal until the entire GOP Conference has a chance to review the package, a condition that has slowed progress this week, along with the snowy weather.

Reid hopes to defuse this skepticism by unveiling the details to Democratic colleagues at a “very important” meeting scheduled for 12:30 p.m.

“I want every member of the caucus to understand the jobs bill, why we’re moving forward,” Reid said Tuesday night. “A number of members have raised questions with my leadership … and I want to make sure everyone understands clearly what is going on.”

A Democratic aide said there is a 50 percent chance of postponement because of weather.

Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions (HELP) Committee, is one of several lawmakers questioning the strong tilt toward tax cuts.

He has called the focus on tax cuts “shortsighted” and questioned whether it is possible to link employers’ hiring decisions with tax incentives.

“We think that tax incentives can solve any problem, and it doesn’t work like that,” Harkin said.

Many liberal Democrats would prefer to spend the money on infrastructure, such as public school renovation.

“It’s certainly not great,” one liberal policy lobbyist said of the package, which has circulated in draft form. “There are some good things in it, but too much of it is tax credits with an unknown benefit.

“We would like to see a lot more money for infrastructure and a lot more money for green jobs."

Liberal critics have faulted the size of the package, estimated at $85 billion. The House, by comparison, passed a $154 billion jobs package in December.

A Senate Democratic aide familiar with negotiations said critics have become confused about their leaders’ intent.

“We’re not going to move one large bill but a series of smaller targeted bills,” said the aide.

Senate Democratic leaders unveiled a jobs agenda last week consisting of five areas: tax incentives to spur immediate job growth; aid to small businesses; grants to promote energy-efficiency construction; infrastructure spending; and federal aid to state governments.

The Democratic aide said the pending package represents only one area of the agenda.

“We have plans to move smaller targeted bills for each of those five sections and this is the first one,” the aide said. “In response to people who say there’s not enough money for infrastructure and green energy, that’s only true in this first piece of the agenda.”

The aide said that leaders would introduce four other bills that “will serve as the base bills for each of those other sections.”

Each of those bills would have its own special focus: helping small businesses; promoting investments in energy efficiency; funding transportation, water and school infrastructure; and providing aid to states.

But one union official questioned whether any of those targeted bills could win Republican support if not paired with tax cuts.

Despite the skepticism, Democratic leaders believe that they can win bipartisan support without major tax sweeteners.

Their aides point to examples of potential bipartisan cooperation.

Sens. Mary Landrieu (La.) and Olympia Snowe (Maine), the Democratic chairwoman and ranking Republican on the Small Business Committee, respectively, introduced legislation last week to boost small-business contracts.

Sen. George Voinovich (Ohio), a senior Republican on the Environment and Public Works Committee, has joined Democrats in calling for more investment in transportation infrastructure.

Aside from disagreements over the size of the package and the emphasis on tax relief, Reid must also solve a potential rift over expiring provisions in the Patriot Act. An extension of the provisions in the 2001 anti-terrorism law has been included in the jobs bill.

Vulnerable Democratic incumbents, who don’t want to be accused by Republicans of being soft on terrorism, want to extend the provisions beyond the election.

But other Democrats, such as Senate Judiciary Committee Chairman Patrick Leahy (Vt.) and Sen. Russ Feingold (Wis.), want to overhaul and amend the law. They might be inclined to pass a shorter extension.

Labor groups have lobbied senators this week to include an extension of unemployment insurance. Working America, an affiliate of the AFL-CIO, plans to deliver letters to lawmakers urging action.

A GOP leadership aide said a draft of the bill leaked Tuesday was an old version and emphasized that Senate Republicans have not yet agreed to anything.

“No one is really in town to meet and discuss these things,” said the GOP aide, citing the snowstorm. “Most of conference has not yet seen the details.”

As of late Wednesday, Senate Republicans had not scheduled a meeting to discuss the jobs package.

Despite Reid’s initial hope that the Senate would vote on the package this week, it will have to wait until after the Presidents Day recess. Reid said Tuesday that the Senate is not likely to vote again this week.