Federal Relations

June 25, 2010

Senate Fails to Pass Extenders for the Third Time

On Thursday, Senate Democrats failed for a third time to pass a jobs and economic relief bill (tax extenders bill).  Republicans rejected the $100 billion-plus package, which included payments to states to cover for Medicaid costs and an extension of unemployment benefits.  This latest version of the bill reduced the original $24 billion in new state assistance for Federal Medical Assistance Percentages (FMAP) to just $16 billion and also included a phase out of payments altogether. The smaller FMAP payments were also fully paid for with offsets.  Unfortunately, that was not enough to attract the 60 votes necessary and the measure failed 57-41.  Both Senators Murray and Cantwell supported the measure.

Individual portions of the bill may be revived, especially given the almost 1.2 million unemployed workers who are currently living without unemployment benefits.  The FMAP payments are also critical to roughly 29 states – including Washington State – as they have all included these anticipated funds in their current budgets. Senate Majority Leader Harry Reid (D-NV) has expressed great frustration with yet another failure to pass this measure and announced he would pull the bill from the floor and turn to other legislation. 

The Senate will go home at the end of next week for the July Fourth recess period.  When they return, it is expected that they will focus their debate on energy policy, including legislation related to off-shore oil drilling. They will break again on August 6th for a 5-week period.  Unless there is a major breakthrough with those opposed to the bill, Reid seems prepared to wait until after Labor Day before trying again on the extenders bill.