A bipartisan bill to expand veterans health care and disability benefits will not make it to President Joe Biden’s desk until after the July Fourth congressional recess because of a minor tax provision. 

The House is supposed to originate tax bills under the Constitution. So when the Senate passed the bill last week with the tax provision in it, the move created a blue slip problem requiring the bill to be reconsidered. 

Senate Veterans’ Affairs Chairman Jon Tester, one of the bill’s chief sponsors, made a rescue attempt Thursday night as the Senate was preparing to adjourn for the two-week recess. He asked unanimous consent for the Senate to request the return of the papers from the House, and notwithstanding the lack of receipt of the papers that the Senate immediately agree to a resolution dropping the problematic tax provision from the bill.

“Tonight we have a chance to get it back on track,” the Montana Democrat said on the floor. “We have a chance to get it to the House without further delay.”

But without agreement from all 100 senators, there was no chance of fixing the bill before the recess. And Sen. Patrick J. Toomey, R-Pa., promptly lodged an objection.

The Senate first passed the bill last week in an 84-14 vote. The measure would make it easier for veterans exposed to burn pits or other toxic substances to access benefits by presuming that certain types of cancer and respiratory illnesses are connected to service-related exposure. The Congressional Budget Office estimates that the bill would cost $278.5 billion over a decade.

The bill also includes provisions designed to improve care at Veterans Affairs facilities, like one that would give the VA secretary authority to buy out private service contracts of health care professionals if the individual agrees to work at a rural VA facility for at least four years. 

The provision that triggered the blue slip issue would have exempted health care professionals receiving those contract buyouts from having to pay taxes on those funds. 

The tax provision  is “de minimis at best,” Tester told reporters Thursday. “Somebody should have caught it long before we got to this point.” 

A Senate source said the House had the text since May but didn’t notify the Senate of the blue slip issue until Tuesday. The House had passed an earlier, slightly more expansive version in March. 

In objecting to Tester’s unanimous consent request to remove the tax provision, Toomey said he was troubled that the measure would result in nearly $400 billion in current VA health care funding, on top of new benefits that would be provided under the bill, being treated as mandatory spending that is exempt from discretionary spending limits. 

The funding reclassification, which was identified by the CBO, amounts to “a budgetary gimmick that’s designed to allow hundreds of billions of dollars of additional spending on totally unrelated, who-knows-what categories,” Toomey said.

Toomey sought unanimous consent for an amendment to preserve the current-law spending as discretionary. Tester objected, saying it would hold up the new benefits provided by the bill. Toomey then objected to Tester’s underlying request.

Tester had predicted earlier Thursday that there would likely be an objection to his unanimous consent request and said if that happened the House would have to send the bill back to the Senate as a message from the House.

Speaking to reporters at her weekly news conference Thursday, Speaker Nancy Pelosi said only that Congress would send the bill to Biden “soon.”

First, the Senate will have to go through the process of passing the bill again.

“Assuming that nobody plays any games, that means the president probably won’t be able to sign it until the middle of July,” Tester said.  

Aidan Quigley contributed to this report.