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Senate Tees Up Jobs Debate Amid Bad Economic News

The Senate is expected to renew its focus on jobs Monday following a week at home that saw the country unsettled by troubling economic indicators which raised the specter of a double-dip recession.

Pushed by Friday’s unemployment report showing the jobless rate again ticked upward, Senate Democrats are preparing to bring up a bill to reauthorize funding for the Economic Development Administration under the rationale that the agency helps spur job growth.

Senate Republicans, too, will highlight their attention on economic growth, advocating for spending cuts, debt reduction and the elimination of government regulations as a means to calm the markets and spark economic growth.

“We will continue to talk about jobs this week. We’ll focus on the need to get our economy going again by addressing the fiscal crisis and doing something significant about our debt problem,” a senior Republican Senate aide said Friday.

“Creating jobs has been Democrats’ top priority since day one,” Senate Majority Leader Harry Reid (D-Nev.) said in a statement commenting on the May job numbers.

Statistics tracking home sales, manufacturing and consumer confidence as well as overall economic activity were down, failing — along with the job numbers — to meet analysts’ projections of modest growth.

Even as both parties attempt to show voters they are addressing the struggling economy, the Senate also is set to rejoin the time-sensitive debate over raising the debt ceiling, as well as the partisan sniping over controversial changes to Medicare. The two issues have become linked in recent weeks as Congress and the White House race to reach a deal on spending cuts and the debt limit before Aug. 2, when Treasury Secretary Timothy Geithner has said the country is in danger of defaulting on its obligations.

Democrats and Republicans spent the Memorial Day recess sparring over Medicare reform and the GOP’s insistence that any agreement to raise the debt ceiling include an entitlement overhaul.

The Democrats charged throughout the week that Republicans want to “dismantle Medicare,” or “end Medicare as we know it,” and demanded the GOP pull its Medicare proposals off the table in debt ceiling negotiations. They argued doing so would ease the way for a compromise that is likely to include significant spending cuts and debt reduction. Democrats have vigorously attacked the House GOP budget that called for changing Medicare into a subsidy for private insurance.

Democratic Sens. Sherrod Brown (Ohio); Bob Casey (Pa.) and Frank Lautenberg (N.J.) held multiple in-state events with seniors to rally opposition to the GOP Medicare plan.

The Senate Democratic Conference also organized conference calls to push its position, with Sens. Tom Harkin (Iowa); Bob Menendez (N.J.) and Jack Reed (R.I.) participating. Senate Republicans, who charge that Democrats have no plan to save Medicare from insolvency and argue that only Democrats have voted recently to cut Medicare funding, held similar events designed to promote their efforts on Medicare.

Republicans traveling at home to communicate this message included Sens. Lamar Alexander and Bob Corker, of Tennessee; Ron Johnson (Wis.) and Jerry Moran (Kan.).

Johnson, speaking by telephone from Wisconsin, acknowledged that the Democrats’ attacks are having some effect. But he said most of his constituents understand the scope of the problem and are supportive of Republicans’ push to reform Medicare, a government-run health care program for seniors.

“I think people realize we’re trying to save it. It doesn’t take very long to run through the numbers for people. Their jaws kind of drop,” the Wisconsin Republican said. “An awful lot of people are pretty discouraged with [the Democrats]. … They’re pretty disappointed that other side isn’t stepping up to plate and offering solutions.”

Casey, in a telephone interview from the Keystone State, said his opposition to overhauling Medicare has been well received in Pennsylvania and said the GOP’s charges have not gained traction. The Senator, who is up for re-election in 2012, described a meeting with Medicare recipients at a downtown Philadelphia senior center at which attendees thanked him for opposing a Medicare overhaul.

“We have had a lot of reaction now in our state … a lot of reaction, obviously, against the proposal the Republicans made,” Casey said. “I think that debate and the vote that was cast broke through. I think people really paid attention.”

Republicans, arguing that long-term spending cannot be addressed absent entitlement reform and recognizing a leverage point within the debt ceiling negotiations, are demanding that a deal include the Medicare overhaul component.

But Democrats, opposed to that Medicare plan, have called on the Republicans to drop this demand, suggesting they are prepared to accept deep spending cuts requested by the GOP in exchange for removing the entitlement program from the debt ceiling discussions. In a conference call on Friday, Harkin and Reed told reporters Democrats are ready to deal, while asserting that the Republicans’ position on Medicare vis-à-vis the debt ceiling hike is unreasonable.

“I think the risk of not raising the debt ceiling is so significant that we should be focused on that,” Reed said.

Added Harkin: “Do I believe that Medicare should be off the table? You bet I do, because it has nothing to do with the default crisis right now.”

Staff Writer Jessica Brady contributed to this report.

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