CHN: Unemployment Insurance, Medicaid, and Veterans’ Benefits Tangled in Funding Disputes

Efforts to bring a modest set of domestic priorities to a vote in the House were stalled last week as Blue Dog Democrats raised objections to funding veterans’ education benefits without finding other program reductions or revenue increases to cover the cost.  The Blue Dogs are a group of fiscally conservative Democrats who prefer not to deepen the deficit through new tax cuts or entitlement spending that is not paid for.
Extended weeks of unemployment insurance and a halt to restrictive Medicaid regulations were among the items caught up in the dispute.  These are expected to be included in a House floor amendment.  Although these domestic items are expected to be voted on separately, eventually they will be combined with supplemental funding to continue paying for the wars in Iraq and Afghanistan, as well as House-proposed war policy provisions.  House leaders think that they may be able to resolve the dispute with the Blue Dogs the week of May 12.

Many human needs advocates have urged enactment of a set of domestic initiatives to help with recovery from the recession and to prevent other funding shortfalls.  (See Towards Shared Recovery, at  They believe that enacting extended unemployment insurance, increased food stamps and home energy aid, and preventing Medicaid, child support or Head Start cutbacks, for example, are responses to an economic emergency.  In such circumstances, economists generally recommend against offsetting the cost of such items because service cuts or increased revenues may undo the anti-recession benefit of the new spending.  In addition, veterans’ advocates have pointed out that the wars themselves are not paid for, and therefore object strongly to holding up adequate funding for benefits to help the people who serve in those wars.

On the Senate side, Appropriations Committee Chair Robert Byrd (D-WV) plans to report out this week a supplemental appropriations bill including at least $7 billion more for non-war items than the House is now considering.  As outlined by the Committee on May 7, the Senate will also include extended UI, stopping the Medicaid regulations, and G.I. education benefits.  The Committee will also recommend international food assistance, help for recovery efforts from Hurricanes Katrina and Rita, state and local law enforcement grants, emergency federal highway funds, Food and Drug Administration funding, preventing rural school lay-offs, VA trauma centers, and an invest in science initiative.  Advocates are continuing to seek more of the services they believe both alleviates hardship and boosts the economy – including food stamps and other nutrition aid, and various ways of raising incomes/preventing loss through summer jobs for youth, child support enforcement, home energy assistance, etc.

Congressional leaders are still hopeful that they can finish work on the full supplemental appropriations package before the Memorial Day recess.  With food and energy prices rising and long-term joblessness growing, it is feared further delay will prolong the recession.

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