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Road Map: Reid Lays Out a Very Ambitious June Agenda

Senate Majority Leader Harry Reid (D-Nev.) has eight items on his to-do list, but with just four weeks to go until the July Fourth recess, he’ll be lucky if he gets three of them done.

The Senate will lead off this week with a replay of the House’s prerecess fight over tax extenders and unemployment benefits.

Those two issues have been no-brainers for both parties in the past. But fresh fears about deficit spending have infected Democrats and Republicans, and Members have separate gripes about various provisions in the mammoth bill. The price tag of the measure was whittled down in the House before Memorial Day over fiscally conservative Blue Dog Democrat concerns about its impact on the deficit.

Reid appealed to the historic bipartisanship that has accompanied the measure in the past, saying on the floor Monday, “I hope both sides can come together to give [the unemployed] the help they and our economy need. This legislation cuts taxes for middle-class families and small businesses. … It’s something Democrats and Republicans should come together and finish, because it’s something we can all support and be proud we did.”

But Minority Leader Mitch McConnell (R-Ky.) expressed more pride in opposing the package, which he dubbed the “deficit extenders bill.”

“The original purpose of this bill is to give America’s job creators an assurance that the long-standing tax benefits they’re counting on to retain workers won’t be pulled out from under them,” McConnell said on the floor. “But because Democrats can’t seem to resist any opportunity to use a must-pass bill like this as a vehicle for more deficit spending, they’ve piled on tens of billions of dollars in unrelated spending and debt on top of it.”

Reid is expected to add back some costs that the House cut — including Medicaid money for states — but he still faces the difficult task of rounding up his own Members while also peeling off a handful of Republicans to pass the measure.

A core group of Democrats are pushing for changes to how the bill would tax hedge fund managers who receive payments as “carried interest.”

Although union activists and other Democrats have opposed a carve-out for venture capitalists, supporters — including Democratic Sens. John Kerry (Mass.), Maria Cantwell (Wash.), Bob Menendez (N.J.), Mark Warner (Va.) and Budget Chairman Kent Conrad (N.D.) — argue the exception is needed to help spur investment.

Reid and Finance Chairman Max Baucus (D-Mont.) reportedly discussed a number of options with the recalcitrant Democrats last week, and one aide familiar with the negotiations said it appears likely a deal can be reached by midweek.

According to this aide, five lawmakers were expected to meet during Monday evening’s votes to discuss a potential deal.

Assuming Reid can find a way to shoehorn those Members in — either through language in the manager’s amendment or an amendment offered during floor debate — he likely will still face opposition from moderates who object to deficit spending.

Senate Democrats acknowledge that while Blue Dog support for the House compromise may give moderates such as Sen. Ben Nelson (D-Neb.) some political cover, it may not be enough to get them to vote “yes.”

As a result, Reid will be forced to once again go to the GOP moderate well for support, an exercise that has become increasingly difficult over the past year. Republican leaders have looked to tap into popular discontent with the national debt, and thus far have held their 41-member Conference together in opposing the extenders bill.

While Reid is expected to whip moderate Republicans such as Sens. Olympia Snowe (Maine), Susan Collins (Maine) and Scott Brown (Mass.), it is unclear what changes he would need to make to the bill to bring them along.

Reid hopes to finish up the measure this week, but aides said the debate is likely to spill into next week given the number of amendments Members on both sides will want to offer.

Either way, Thursday has been set aside to vote on a Sen. Lisa Murkowski (R-Alaska) resolution to kill the Environmental Protection Agency’s ability to regulate greenhouse gases as pollutants. Democratic aides said the vote could be close, given Murkowski needs only 51 votes to succeed and already boasts support from a handful of Democrats.

Following tax extenders, Reid said he’d like to move to a job creation bill aimed at small businesses. The centerpiece of the bill would be a measure — sponsored by Small Business and Entrepreneurship Chairwoman Mary Landrieu (D-La.) and ranking member Snowe — to increase small-business lending options.

But aides cautioned that the agenda for this next work period is somewhat fluid, given Reid could change course if his caucus returns to Washington agitating for action on other issues.

“So much of what comes next depends on what Members come back and say to Reid,” one senior Senate Democratic aide said.

Other possible contenders for the floor include a bill to mitigate the effects of a Supreme Court decision that essentially gave corporations the ability to spend without limits in federal elections. The decision in Citizens United v. Federal Election Commission said corporations have the same free-speech rights as individuals.

Though Reid gave lip service on the floor to the possibility of bringing up a food safety bill and debate on the Defense Department authorization measure, both are unlikely candidates for action this month.

Reid also acknowledged that he would not be able to act on a bill to increase oil company liability caps for spills, such as the devastating BP leak in the Gulf of Mexico.

Meanwhile, any conference reports on the Wall Street regulation bill or on a House-passed supplemental war spending measure could elbow out other legislation. Reid said Monday that he hopes to send the Wall Street measure to Obama by July Fourth, and the Defense Department has been pressing for its emergency funding.

Reid spokesman Regan Lachapelle said regardless of what’s on the agenda, Democrats will seek to tie their efforts to “standing on the side of middle-class families.”

Republicans, meanwhile, said they hope to highlight what they see as Democratic deficiencies in addressing job creation and the ballooning debt.

“These two key economic issues are fueling tremendous voter anger at liberal leaders in Congress and at the White House,” one senior Senate GOP aide said.

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