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If the House approves the measure, it would set up a chess match with Senate leaders on how to resolve the unemployment and Medicare doc fix issues.
Senate Majority Leader Harry Reid (D-Nev.) would face two basic choices. He could take up the House-passed bill, amend it to include the unemployment and doc fix provisions, and send it back to the House. Or he could pass the clean bill and then work on separate legislation for the other issues.
Facing a possible filibuster and a Senate Republican Conference that has tried to work in lock step with its House counterpart, Reid could face serious difficulties if he attempts to amend the clean bill. The payroll tax cut extension has been a top priority for the White House for months and at the center of Congressional Democrats' messaging, much more than unemployment insurance has been.
By moving the payroll tax cut on its own, sources said, Republicans are trying to ensure that they don't get stuck in the same situation they found themselves in last December: blamed for failure. If Reid kills the clean bill in the Senate, the tables could turn.
If Senate Democrats move separately on a bill after passing the tax cut, they could face an easier path, according to sources familiar with Senate procedure who spoke on the condition of anonymity so that they would not jeopardize potential progress on a compromise.
On unemployment benefits, Democrats could draft legislation that would represent a compromise position between current law and the House-passed plan approved last year. The House legislation cut the weeks of eligibility for benefits to 59 from 99 and included a series of other changes, such as enabling states to drug test recipients and mandate jobless Americans without high school diplomas to earn their equivalency degrees.
Democrats could put forth a bill that includes an eligibility limit of 75 weeks of coverage — a number in the ballpark of what was being negotiated by Reid and Senate Minority Leader Mitch McConnell (R-Ky.) in full-year negotiations that collapsed before Christmas. According to projections, 10 months of unemployment benefits for that duration would cost about $28 billion. The Senate then could use commonly discussed offsets, such as spectrum auctions — which the Bowles-Simpson deficit reduction panel estimated to bring in $55 billion from 1993 to 2010 — to pay for the extension.
In 2010, Republican Sens. Olympia Snowe (Maine), Susan Collins (Maine) and Scott Brown (Mass.), in addition to now-retired Sen. George Voinovich (Ohio), voted multiple times for unpaid-for jobless benefits extensions. Snowe and Brown are up for re-election. Just last week, Sen. Dean Heller (R-Nev.), who is in a competitive race this November, sent a letter to Camp calling for an extension of current law in his state. Other GOP Senators facing tough re-elections, such as Dick Lugar (Ind.), could face pressure to support a fully offset bill, according to Republican aides.