War Supplemental Schedule and Delay

May 14, 2008

Negotiations between the House and Senate on the war supplemental spending measure could drag on past the Memorial Day recess, House Speaker Nancy Pelosi said today.

Further negotiations with the Senate over a number of provisions — including a plan to pay for an expanded veterans’ education benefit by imposing a tax surcharge on wealthy Americans — will be necessary before any bill could reach the president.

Majority Leader Steny H. Hoyer (D-Md.) said, however, that June 15 was the likely deadline for getting a bill enacted.

Pelosi and other Democratic leaders, including Majority Whip James E. Clyburn (D-S.C.), said they were confident the measure would win strong support in the party now that the concerns of conservative Blue Dog Democrats have been assuaged.

Democrats have settled on a plan that would provide the $183.8 billion remaining in Bush’s fiscal 2008 request plus money to cover operations in Iraq and Afghanistan during the initial months of fiscal 2009, which begins Oct. 1. But they also want to include a major expansion of GI Bill education benefits for veterans and a 13-week extension of unemployment benefits beyond the usual 26 weeks.

Consideration of the spending bill has been held up in the House because of Blue Dog objections to a leaders’ plan to include the education benefit — which the Congressional Budget Office says would cost $52 billion over 10 years — without offsetting the costs. Members of the coalition are staunch advocates of the pay-as-you-go budget rule, which requires that any new mandatory spending or tax cuts be offset by spending cuts or revenue-raisers, and they felt leaders were violating the spirit of the rule.

To meet the Blue Dogs’ demands for offsets, Democratic leaders plan to include in the package a new 0.5 percent surtax on adjusted gross income above $500,000 for individuals and $1 million for joint filers. Aides and lawmakers said the Joint Committee on Taxation has determined the plan would raise about $54 billion over 10 years, more than enough to pay for the education benefits.

Pelosi said she would push the Senate hard to include the measure. But many House Democrats said they were concerned the proposal would be blocked by a possible filibuster in the Senate, where Democrats have a razor-thin 51-49 voting edge and need Republican help to reach the 60 votes required to override filibusters. Senate Republicans are certain to reject the proposed tax surcharge, and some conservative Democrats might oppose it as well.

Democrats in both chambers have repeatedly proposed raising taxes on the rich to offset the cost of a whole range of other policy proposals, both tax-related and otherwise. But their proposals have gained no traction in the Senate.