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BOXER 5WashingtonFreeBeacon/ElizabethHarrington

Amendment would close loophole that allows tax refunds for illegal aliens.

Senate Democrats on Thursday blocked a Republican attempt to restore military pensions cut in last month’s budget deal, denying a vote that would save up to $20 billion by closing a loophole that allows tax refunds to go to illegal aliens.

Sen. Barbara Boxer (D., Calif.) called an effort by Sen. Kelly Ayotte (R., N.H.) to repeal the military retiree cuts “fiddling while Rome burns.”

Majority Leader Harry Reid (D., Nev.) “filled the amendment tree” on Thursday, ending debate and blocking any Republican amendments to a bill to extend unemployment insurance (UI) benefits.

Among them was Ayotte’s measure, which would repeal cuts to military pensions by ending a loophole in the tax code that allows illegal immigrants to receive the Additional Child Tax Credit. Her attempt to get a vote failed 42-54, with only one Democrat, Sen. Joe Manchin (W.Va.), voting with Republicans.

“It’s a sad day when a common sense amendment to responsibly pay for legislation that helps struggling Americans, repeals unfair military retirement benefits and reduces the deficit can’t even get a vote in the Senate,” Ayotte said in a statement.

The amendment would have repealed a provision in the budget deal that hits military retirees with a 1 percent decrease in their annual cost-of-living adjustments (COLA), which could cost servicemembers up to $124,000 in lost retirement pay. Federal civilian retiree pensions were not cut.

The budget agreement also did not exempt disabled military retirees despite early assurances from the House Budget Committee. The cuts will save an estimated $6 billion over 10 years.

Ayotte offered her plan, the “Keeping Our Promise to Our Military Heroes Act’’ (S. 1869), as an amendment to the UI bill. The measure would require a Social Security number in order for an individual to receive the Additional Child Tax Credit. Ayotte’s office said the bill would save approximately $20 billion over 10 years.

According to the Treasury Inspector General for the Tax Administration (TIGTA), the refund provides incentives for aliens to enter the country illegally and cost taxpayers $4.2 billion alone in fraudulent payments in 2010.

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