Reed crafts deal with chastened GOP on taxes, jobless benefits

By Ted Nesi

PROVIDENCE, R.I. (WPRI) – It was the weight of public opinion as much as any savvy negotiating tactics by the Democrats that got Republican lawmakers on Thursday to continue both the payroll tax cut and extended jobless benefits, according to U.S. Sen. Jack Reed.

The GOP negotiators appeared chastened by the drubbing they took for nearly letting the tax cut expire in December, particularly with polls showing many Americans favor increasing taxes on the wealthy, Reed told WPRI.com on Thursday night.

“I think people just said, they don’t understand our predicament – it’s tough out there and they seem to be insensitive to that,” he said. “I think they demonstrated that attitude last December, and I think the American public rightly are asking for practical, pragmatic results.”

Reed said he thinks the $150 billion measure “will definitely pass” both the House and Senate in votes scheduled for Friday “with strong bipartisan support” – a very different outcome from the brinksmanship that marked last summer’s negotiations over the debt ceiling.

“I think overall the ability to continue to give working Americans a tax cut, to continue to provide substantial unemployment benefits, and also to make sure they’re focused over time on the most impacted states in terms of unemployment – it makes sense,” he said.

That’s not to say Reed thinks the final compromise is perfect. The senior Democrat criticized a GOP proposal to reduce the maximum duration of unemployment benefits from 99 weeks to 59 weeks as well as President Obama’s stated desire to end them at 79 weeks. The final deal will gradually lower the cap.

“We tried to make the transition gradual,” Reed said. “By the end of the year we’ll be at 73 weeks, and that will be really correlated with those states that have high unemployment,” including Rhode Island, where the jobless rate was 10.8% in December.

“One thing I didn’t want to see at the end of this, because of the complexity of the [jobless benefits] system, was Rhode Island not being able to be among the states entitled to the longest benefits, because we do have a different economic situation,” Reed said. “The real solution to all this, though, is getting jobs.”

The senator said he expects the final compromise will help the economy because of the stimulative impact of the two policies. He expressed frustration that Republicans were willing to extend the tax cut by adding to the deficit but wouldn’t treat unemployment insurance the same way.

Reed also managed to insert into the final deal a longtime priority of his: a federal work-sharing program, which will offer $500 million that states can use to boost workers’ paychecks if their employers need to reduce their hours. The senator is a big fan of the Rhode Island WorkShare program, which has worked in Germany, too.

“We have a tremendous success story in Rhode Island that I think can translate to the national level,” Reed said. He recently brought Department of Labor and Training Director Charlie Fogarty to Washington to testify before a Senate committee about the program, which started in 1991.

If Rhode Island meets all the bill’s requirements, the state won’t need to use its own funds to pay for the work-share program for the next three years. That federal subsidy would have saved Rhode Island $36 million if it had been in place over the last three years, according to Reed’s office.

“It will give the state an incentive to be more aggressive in reaching out to companies and telling them this is an option,” Reed said. “They already did it very well, but there was also the inhibition that we have to pay for these costs.” WorkShare prevented 12,485 layoffs in Rhode Island from 2008 to 2010, the state estimates.

Overall, Reed expressed satisfaction at helping broker a bipartisan deal that all sides can accept despite the polarization in Congress. “To be able to have discernible, important program now in place not on a transitory, temporary basis but at least till the end of the year – that feels better,” he said. “But we’ve got a lot of work to do.”

• Related: Jack Reed: Tax hike on millionaires should pay for payroll cut (Jan. 6)

(photo: Ted Nesi / WPRI)

blog comments powered by Disqus