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June 8, 2010 Tuesday 7:27 PM EST
SECTION: PERSONAL FINANCE; Careers
LENGTH: 512 words
HEADLINE: Senate takes up jobs bill, adds Medicaid funding
BYLINE: Ruth Mantell, MarketWatch mailto:email@example.com.
Ruth Mantell is a MarketWatch reporter based in Washington.
WASHINGTON (MarketWatch) — Helping states pay for Medicaid and raising taxes for investment-fund managers are two controversial provisions in a far-reaching jobs bill taken up by the U.S. Senate on Tuesday.
The legislation would help states and local governments invest in infrastructure, extend various tax breaks and some unemployment insurance benefits for jobless workers, and update Medicare physician payment rates, among other actions.
“Americans who are out of work are depending on our job creation efforts. This bill extends the needed lifeline of unemployment benefits to more than 5 million Americans who would not be able to support themselves or their families without this help,” said Democratic Sen. Max Baucus of Montana, on Tuesday.
“This bill continues valuable tax incentives to families and businesses that will help them in these difficult economic times,” said Baucus, who is chairman of the Senate Finance Committee.
A final vote in the Senate could come next week, according to an aide for Sen. Harry Reid (D., Nev.), the Senate majority leader.
The Senate bill differs in significant ways from the version passed by the House of Representatives on May 28. The House would have to vote on the legislation that passes the Senate.
The carried-interest provision is one of the more controversial aspects of the bill. It calls for raising taxes on the carried interest income of investment fund managers by treating that income as ordinary income rather than capital gains. The House bill takes a tougher stance — that bill would treat 75% of some carried interest as ordinary income, compared with 65% in the Senate version. The House version would raise about $17.7 billion over 10 years, compared with about $14.5 billion in the Senate version, according to official estimates.
The Senate version of the bill would also extend a temporary increase in funds to help states pay for Medicaid, a provision that was stripped out of the House version of the bill, which passed on May 28. The House also dropped a provision that would have extended subsidies to jobless workers to help them pay for their Cobra health-care payments.
The Senate’s Medicaid provision would cost about $24 billion over 10 years.
Debate about the growing deficit has delayed the bill. The Senate’s package would widen the deficit by almost $80 billion over 10 years.
Both versions of the bill would extend some federally-funded unemployment insurance benefits through November. The benefits expired last week, and an extension would be retroactive. Without extended benefits, as many as 1.2 million jobless workers could be cut off from the jobless benefits this month, according to the National Employment Law Project. The bill would also update Medicare physician payment rates.
Both the Senate and the House bill contain various individual and business tax breaks, and would support small businesses and summer jobs for young people, among other provisions.
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