Majority leader stokes party fears with about-face on $85 billion jobs bill

Senate Majority Leader Harry Reid (D-Nev.) has decided to stand his ground and slug it out with Senate Republicans over a jobs bill, daring the GOP to vote against a stripped-down version.
Centrists in the Senate Democratic conference who want to “get points on the board” before Election Day fear the tactic could backfire and leave the leader empty handed on a big political issue.

But Reid has decided to call Republicans’ bluff, according to a Democratic leadership aide, and force them to vote on a package of proposals that have had bipartisan support and do not increase the federal deficit.
“Reid has simplified the process by focusing on fully paid-for measures that will create jobs; he’s calling their bluff,” said the Democratic leadership aide.
It is a strategy Reid will pursue on several other jobs bills he plans to advance throughout the year.
Some Democrats have grumbled that members of their party have run scared since Sen. Scott Brown (R) won a special election in Massachusetts. These lawmakers have said it’s a mistake to give in to Republicans without winning real concessions in return.
Reid stunned colleagues and lobbyists Thursday afternoon by announcing a plan to scrap jobs legislation unveiled only hours earlier by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Sen. Chuck Grassley (Iowa), the ranking Republican on Finance.
Reid took four core components from Baucus’s bill but ditched a slew of provisions designed to attract GOP support, including $31 billion in tax relief extenders — a prize for business lobbyists.
Reid also dropped three-month extensions of Unemployment Insurance and COBRA healthcare premium subsidies, benefits to recently laid-off workers that traditionally sail through Congress.
He also dropped provisions to freeze a scheduled cut in doctors’ Medicare reimbursements and extend the Patriot Act.
Democratic aides say the tax extenders, unemployment insurance, COBRA subsidies, doctors’ fix and Patriot Act extension will be used to carry future jobs bills through the Senate.
The four components Reid has included in the first Senate jobs bill have a history of bipartisan support.
The $13 billion tax credit for employers who hire new workers, the centerpiece of the package, is named after its lead sponsors, Sens. Charles Schumer (D-N.Y.) and Orrin Hatch (R-Utah).
A provision to help small businesses write off the cost of major purchases is a traditional favorite among GOP lawmakers.
The Build America Bonds proposal, which would help state and local governments lower borrowing costs, is based on legislation that has been sponsored by Sen. Ron Wyden (D-Ore.) and co-sponsored by GOP Sens. Susan Collins (Maine), John Thune (S.D.) and Roger Wicker (Miss.).

A one-year extension of the Surface Transportation Act caters to Sen. George Voinovich (Ohio), the second-ranking Republican on the Environment and Public Works Committee, who has called for an extension of the highway program.
By stripping the jobs bill down to these four provisions, Reid is daring Republicans to block it, which Democratic strategists believe would prove a costly political mistake.
“I think they have to vote for it,” said Jim Kessler, vice president for policy at Third Way, a Democratic think tank. “This is the tightrope Republicans are walking.”
Kessler noted that before the 1994 election, Republicans in Congress blocked a Democratic healthcare proposal but did not dare to kill a crime bill or the North American Free Trade Agreement.
Kessler said Republicans must be careful not to be seen as blocking non-controversial legislation that is aimed at improving the economy and tackling other national problems.
“As long as Republicans feel the political tide is with them, it’s to their benefit for Congress to pass as few things as possible,” Kessler said. “If they’re seen as obstructing non-controversial things that could help the economy, they would then embody what people think is wrong with Washington.
“That’s the line they’re walking,” he added.
Reid’s strategy is to dare Republicans to cross the line by voting against the employers’ tax credit, small-business depreciation, highway money and Build America Bonds provision in his pared-down bill.
So far, Senate Republicans have kept quiet about how they will respond. But Senate Republican Leader Mitch McConnell (Ky.) will have more trouble keeping his troops together against the new jobs bill than he did against the Democrats’ healthcare reform plan. 
Reid will employ a similar strategy with other elements of the jobs agenda that Senate Democrats have unveiled.
The $31 billion in tax extenders, the extensions of unemployment insurance and COBRA, the Patriot Act and the doctors’ fix can be split up and attached to future jobs legislation, presenting Republicans with difficult votes.
Democratic leaders say they will unveil several more jobs bills this year, each addressing specific areas: energy efficiency, infrastructure, help for small businesses and aid to state and local governments.
Liberal advocates and union officials complained that if all of the provisions that GOP lawmakers liked were put in one bill, it would sap future negotiating leverage.
Reid decision to kill Baucus’s bill softened the anger of liberal and labor critics, but they are not satisfied.

The Senate Finance Committee estimates the four core proposals Reid plans to advance would cost $15 billion over 10 years, significantly less than the $85 billion package advanced by Baucus and Grassley.
Liberal and labor advocates want Senate Democrats to advance jobs legislation many times larger, noting the House passed a $154 billion jobs bill in November.
The AFL-CIO has called for a $500 billion jobs initiative.
Thea Lee, policy director of the AFL-CIO, called Reid’s proposal much too small.
“We want politicians to stand up and do the right thing and say the right thing and get credit for being bold on job creation,” said Lee. “It doesn’t make sense for Democrats to paint themselves into a corner and step on their own feet.”
“They should be proud to stand up for a $500 billion jobs bill and not mutter in the corner about the deficit when the economy is in crisis and people are out of work,” Lee added.
Robert Borosage, co-director of Campaign for America’s Future, a liberal advocacy group, said: “$15 billion doesn’t even get to the level of a gesture; it’s too small.”
Borosage said Reid should force Republicans to vote on the $500 billion jobs package favored by labor unions as well as the $154 billion House-passed jobs proposal.
“Then have White House summit and not talk about healthcare reform but talk about jobs,” Borosage said, adding that President Barack Obama should use his bully pulpit to confront Republican lawmakers about not supporting job-creation proposals.