Third-party organizations such as PACs, under FEC rules, are not allowed to coordinate or work directly with candidate campaigns except under very limited circumstances. But recently the Nebraska Democratic Party and the Democratic Senatorial Campaign Committee pushed that envelope by developing television and radio political advertisements that featured U.S. Sen. Ben Nelson, a Nebraska Democrat who is expected to appear on the 2012 ballot. (Nelson has not yet officially launched his 2012 bid and has said he will make his decision next month.)

State Democrats, the DSCC and the Nelson campaign maintain that the ads are not campaign ads because no one is asked directly to support Nelson’s election. Instead, they say, these are issue ads, or ads that are intended to educate voters on specific issues and/or policy debates. It’s estimated that roughly $1 million has been spent on the ad campaign thus far; and, according to Nelson’s campaign, similar ads were run in 2006 at a tune of roughly $1.5 million.

In response, Nebraska Republicans filed a complaint with the FEC, charging that the ads are veiled campaign messages intended for Nelson’s reelection and, therefore, far exceed the $240,000 cap on such coordinated pushes. And American Crossroads, a conservative group founded by Karl Rove, has asked the FEC for an advisory opinion to determine if it can “adopt the tactics” and use federal candidates in its ads. If the FEC rules that such advertisements are indeed issue-based, state parties will no longer be subject to a cap on how much they can spent to help the election hopes of a candidate and third-party groups will have a whole new political buffet at the ready.

On his Comedy Central show, The Colbert Report, Colbert provided his typical take on the controversy before bringing in his attorney and former FEC head Trever Potter to discuss if the Colbert Super PAC could get in on the action.

“These Ben Nelson issue ads and the kinds of ads that Karl wants to run, they’re not campaign ads, right?” asked Colbert. “They’re just issue ads that happen to have the candidate in them who is campaigning for office. Just because someone is in my ad doesn’t mean that we are coordinating with their campaign — anymore than just because [or] if my penis was in someone’s vagina doesn’t mean we are having sex.”

Ultimately, Colbert signs a letter to the FEC asking the body to approve the American Crossroads’ request. In addition to the letter, which was not read on air, Colbert developed a sample ad, embedded below and featuring former Louisiana Gov. Buddy Roemer, to show the FEC members how approving the request would play out in advertisements.

It isn’t the first time Roemer has appeared on The Colbert Report, nor is is the first time the Democrat-turned-Republican has taken on special interest money in politics. His campaign has has a self-imposed ban on special interest money, and will only accept individual contributions of $100 or less.

The U.S. Senate passed the Budget Control Act of 2011 on Tuesday, after the bill was approved Monday by the Republican-controlled House of Representatives.

Forty-five Democrats, 28 Republicans and independent Sen. Joe Lieberman voted in favor of the bill. Nineteen Republicans, 6 Democrats and independent Sen. Bernie Sanders voted against the bill.

Among those Democrats voting against the bill were Sens. Kirsten Gillibrand (N.Y.), Bob Menendez (N.J.) and Ben Nelson (Neb.), all up for re-election in 2012 (Sanders, who caucuses with Democrats, is also up for re-election). Menendez said Monday that “I cannot in good conscience support a plan where soldiers, seniors, students, and working families must endure trillions in cuts, while oil companies, billionaires, and corporate jet owners are not asked to pay their fair share.”

Sen. Dean Heller (R-Nev.) and Sen. Orrin Hatch (R-Utah) were the Republicans up for re-election in 2012 who voted against the bill. Hatch, who could be facing a primary challenge from a more tea party-friendly candidate, said on the Senate floor Tuesday that he rejected the bill because it did not sufficiently cut spending.

Two members of the “Gang of Six,” a bipartisan group of senators that proposed their own $3.7 trillion deficit reduction package containing both spending cuts and revenue increases, voted against the final bill: Tom Coburn (R-Okla.) and Saxby Chambliss (R-Ga.).

In a statement after the vote, President Barack Obama said that the bill was an important first step, but that revenue increases for further deficit reduction are necessary. He also said that he would seek a jobs bill after Congress returns from their upcoming August recess.

Clinton, speaking in San Fransisco earlier this week, suggested that the State Department, which is currently reviewing the massive pipeline project, would eventually approve it. But her comments were a bit unclear. The questioner asked about the Alberta Clipper pipeline, which has already been approved. But Clinton appeared to talk about the Keystone XL pipeline, which is still pending.

“So as I say, we’ve not yet signed off on it,” she said. “But we are inclined to do so.”

Here are Clinton’s full remarks on the issue:

Question: Another international issue that you signed in on last year was the Alberta Clipper, a pipeline from Alberta that brings tar sands, oil sands directly into Wisconsin to the U.S. Midwest. This is some of the dirtiest fuel in the world. And how can the U.S. be saying climate change is a priority when we’re mainlining some of the dirtiest fuel that exists. (Applause.)

Secretary Clinton: Well, there hasn’t been a final decision made. It is -

Question: Are you willing to reconsider it?

Secretary Clinton: Probably not. (Laughter.) And we – but we haven’t finish all of the analysis. So as I say, we’ve not yet signed off on it. But we are inclined to do so and we are for several reasons – going back to one of your original questions – we’re either going to be dependent on dirty oil from the Gulf or dirty oil from Canada. And until we can get our act together as a country and figure out that clean, renewable energy is in both our economic interests and the interests of our planet – (applause) – I mean, I don’t think it will come as a surprise to anyone how deeply disappointed the President and I are about our inability to get the kind of legislation through the Senate that the United States was seeking.

Clinton’s remarks have caused at least two lawmakers to speak out. Sen. Mike Johanns (R-Neb.), who has already said he doesn’t support the pipeline project that would cut through his state, wrote a letter to Clinton yesterday asking for clarification on her comments. “Your comments inspire further doubts as to the validity of the review process taken on by the department,” he said.

Johnanns, in an interview with The Hill yesterday, suggested that the State Department could have a lawsuit on its hands if it predetermines the outcome of the Keystone XL review. “One would imagine that this decision will be challenged,” he told The Hill. “And if the net result is the ultimate decisionmaker … had already prejudged this then you have a problem where this would be determined to be arbitrary and capricious.”

Sen. Ben Nelson (D-Neb.) followed suit yesterday with his own letter raising similar questions.

“It’s made it needlessly controversial,” Senate Minority Leader Mitch McConnell said yesterday. “I can’t tell you right now how easy it will be to go forward with that bill, but it’s certainly created an element of controversy that would not have been otherwise there.”

Will opposition to the DREAM Act, which would help some illegal immigrant students become legal residents, actually stop the bill? It’s unclear, but politicians are generally averse to voting down major defense legislation. Last year, Sen. Carl Levin (D-Mich.) successfully added language that expanded protections for hate crimes to the defense authorization bill. Republicans were angry, but approved it anyway.

Still, senators argued adding the DREAM Act is a misuse of the bill. “It’s totally unrelated to the defense authorization bill,” Sen. John Thune (R-S.D.) bristled yesterday.

“This is an all-time low for me being in the Senate and that’s saying something,” Lindsey Graham told Foreign Policy’s The Cable yesterday. “The one area that has been kept off limits from partisan politics has been the defense of our nation. To say that you’re going to bring up a defense bill and put the Dream Act on it … to me is very offensive.”

Some Democrats have joined in the threats. Sen. Ben Nelson (D-Neb.) said today Reid may lose his support for the defense authorization bill if the DREAM Act is added.

“It would depend on a lot of factors, but it certainly would make it that much more difficult to support something such as the defense authorization bill,” Nelson said. “Don’t do it.”

“I support extending all of the expiring tax cuts until Nebraska’s and the nation’s economy is in better shape, and perhaps longer, because raising taxes in a weak economy could impair recovery,” Nelson said today.

Other moderate Democrats are coming out in opposition to the tax hikes, even on the wealthiest, in the House. For instance, Rep. Jim Himes (Conn.) supports an extension because $250,000 a year “does not make you really rich.” (Maybe not in Fairfield County, which Himes represents. It is one of America’s wealthiest counties, and has the highest concentration of hedge funds outside of Manhattan. If you wanted to, you could buy a house like this.) But, only about two percent of filers make that much nationally.

If Democrats attempt to raise taxes on high-income Americans, a bill could founder in the Senate — and if Congress comes to no agreement on the tax cuts, they expire. That means income taxes revert to 2000 levels for everyone, hiking taxes even on low earners.

On the list of possible actions: additional tax cuts for small businesses beyond those included in a $30 billion small-business lending bill before the Senate. It’s not clear what those tax breaks would target or how much they might cost in lost revenue to the government.

Also in the mix: a possible payroll tax cut for businesses and individuals, as well as other business tax breaks, according to people familiar with the discussions. Currently, income taxes are scheduled to rise with the expiration of Bush-era tax cuts at the end of this year.

Of the measures under consideration, tax breaks would be the easiest to pass through Congress; in the Senate, new spending might be impossible to get past 41 Republicans plus Sen. Ben Nelson (D-Neb.), who has mostly refused any expansion of the deficit.  And a broad-based but short-term payroll tax cut might be the best way to gin up hiring. If businesses are given a big incentive to hire, but only a short time to do it, that would provide the most immediate boost.

“For states that can meet their state’s education needs without the additional federal funding provided by the new education jobs law, my bill will direct the unused funds to reducing the federal deficit,” said Senator Nelson. “The new law will keep thousands of teachers on the job across our country and I’m pleased that it is fully paid for by cutting other federal spending and closing foreign tax loopholes for businesses.

“If a state or states, however, don’t need the additional money, we should make sure the unused funds aren’t shipped off to other states. Instead, the unused funds should pay down the federal deficit.”

Even if a state’s senators did not vote for the measure, the state will receive some of the funds — $10 billion to keep teachers working, and $16.1 billion for Medicaid. States had initially requested much more than that to help them close their fiscal gaps and to avoid layoffs.

That leaves Senate Democrats where they’ve so often found themselves this past year — with 59 votes, one shy of breaking a Republican filibuster and opening debate.

People in line for a job fair in Ft. Lauderdale, Fla. (Michael Francis McElroy/ZUMA Press)

This afternoon, the Senate cleared a crucial hurdle to reauthorizing the federal extension of unemployment benefits, held up in the Senate for an unprecedented two months. The upper chamber voted down a filibuster of H.R. 4213, also known as the jobs bill or the extenders package — the vehicle for a $34 billion extension of jobless benefits, retroactive to June 2, when they lapsed, and continuing through the end of November.

[Economy1] The cloture vote took place immediately following the swearing-in of Sen. Carte Goodwin (D-W.Va.), the temporary replacement for Sen. Robert Byrd, who passed away at the end of June at the age of 92. Republican Sens. Olympia Snowe and Susan Collins (Maine) joined 58 members of the Democratic caucus — every member save for Sen. Ben Nelson (D-Neb.) — in voting to end debate on the bill. All other Republicans opposed. The final vote was 60 to 40.

The bill now moves to a majority-rules vote on the actual legislation. Democrats hope to pass that today, though Republicans could object and force the majority party to wait 30 hours to vote. After that, the bill returns to the House, where the Democratic leadership plans to pass it as quickly as possible. (The Senate is not voting on H.R. 5618, the House’s standalone version, opting instead to hold a new vote on a failed Senate bill in order to bypass an additional procedural roadblock.) President Obama could sign the bill as early as Wednesday evening, barring procedural hold-ups, and states could begin the process of disbursing the benefits as early as Thursday morning.

The bill does not include an extension of the $25-a-week Federal Additional Compensation funds, tacked onto many unemployment checks. It also does not include any of the other provisions originally included in or proposed for the jobs bill or extenders package: It does not close tax loopholes, or provide Medicaid funding to states, or include funds to keep teachers and other state employees working. It also does not create an additional fifth tier of benefits; federal extensions only continue in states with higher than an 8 percent unemployment rate, and the maximum weeks of state and federal benefits remains ninety-nine.

Nevertheless, the unemployment extension comes as a desperately needed lifeline to 2.5 million American families. “When millions of Americans lost their jobs, they didn’t just lose a place to go to work in the morning,” Majority Leader Harry Reid (D-Nev.) said on the Senate floor on Monday. “They lost their incomes, their savings and their retirement security. They lost their tuition payments. Many lost their homes. They lost their gas money and their grocery money. All of this through no fault of their own. I’m not talking about just a handful of people in an isolated corner of the country. I’m talking about millions of Americans from every one of our states.”

Additionally, economists expect the unemployment benefits extension to have a strong stimulative impact on the economy, as the recovery lags and a growing band of experts calls for more government spending to keep up demand. Lawrence Mishel, the head of the Economic Policy Institute, estimates that the unemployment benefits extension will support 800,000 jobs over the remainder of the year — as the unemployed generally spend their unemployment benefits immediately, rather than using them to pay down debt or to keep as savings. Unemployment benefits usually end up costing the government only about 40 percent of the sticker price, Mishel said on a call with reporters on Monday. “[Passing the unemployment extension] is not only a decent thing to do. It’s one of the most stimulative things you can do to create jobs,” he noted.

But Republicans have argued that unemployment benefits should no longer be considered emergency spending, in which case they would not be allowed to raise the deficit. “We’ve offered ways of paying for these programs, and we’ve been eager to approve them,” argued Senate Minority Leader Mitch McConnell (R-Ky.). “But we can’t support job-killing taxes and adding tens of billions to the already unsustainable national debt. So the only reason the unemployment extension hasn’t passed is because Democrats simply refuse to pass a bill that doesn’t add to the debt. That’s it. That’s the only difference between what they’ve offered and what we’ve offered.” A number of Republican senators — including McConnell and Sen. Scott Brown (R-Mass.) — introduced unemployment bills with offsets.

Over the weekend, President Obama joined the Democratic caucus in hitting at Republicans for blocking the benefits for so long. Never in U.S. history have extended benefits been allowed to expire with unemployment over 7 percent. He devoted his Saturday radio address the topic. And, speaking in the Rose Garden on Monday, flanked by three unemployed Americans, Obama said: “[Republicans] say we shouldn’t provide unemployment insurance because it costs money. So after years of championing policies that turned a record surplus into a massive deficit, including a tax cut for the wealthiest Americans, they’ve finally decided to make their stand on the backs of the unemployed. They’ve got no problem spending money on tax breaks for folks at the top who don’t need them and didn’t even ask for them; but they object to helping folks laid off in this recession who really do need help.”

People in line for a job fair in Ft. Lauderdale, Fla. (Michael Francis McElroy/ZUMA Press)

Today, Congress plans to vote on a federal extension of unemployment benefits, held up in the Senate for an unprecedented two months. The Senate will reconsider H.R. 4213, also known as the jobs bill or the extenders package, as the vehicle for a $34 billion extension of jobless benefits — retroactive to June 2, when they lapsed, and continuing through the end of November.

[Economy1] The vote will take place immediately following the swearing-in of Carte Goodwin, the replacement for Sen. Robert Byrd (D-W.Va.), who passed away at the end of June at the age of 92. That vote will be the 60-vote cloture hurdle to end debate. With Goodwin, the Democrats have 59 in their caucus, and Republican Sens. Olympia Snowe and Susan Collins are expected to cross the aisle, while Sen. Ben Nelson (D-Neb.) will vote no.

The bill will then move on to a majority-rules vote on the actual legislation, which will return to the House, where the Democratic leadership plans to pass it as quickly as possible. (The Senate is not voting on H.R. 5618, the House’s standalone version, opting instead to hold a new vote on the Senate bill, which already failed to pass cloture once, in order to bypass an additional procedural roadblock.) President Obama could sign the bill as early as Wednesday evening, barring procedural hold-ups, and states could begin the process of disbursing the benefits as early as Thursday morning.

The bill does not include an extension of the $25-a-week Federal Additional Compensation funds, tacked onto many unemployment checks. It also does not include any of the other provisions originally included in or proposed for the jobs bill or extenders package: It does not close tax loopholes, or provide Medicaid funding to states, or include funds to keep teachers and other state employees working. It also does not create an additional fifth tier of benefits; federal extensions only continue in states with higher than an 8 percent unemployment rate, and the maximum weeks of state and federal benefits remains ninety-nine.

Nevertheless, the unemployment extension comes as a desperately needed lifeline to 2.5 million American families. “When millions of Americans lost their jobs, they didn’t just lose a place to go to work in the morning,” Majority Leader Harry Reid (D-Nev.) said on the Senate floor on Monday. “They lost their incomes, their savings and their retirement security. They lost their tuition payments. Many lost their homes. They lost their gas money and their grocery money. All of this through no fault of their own. I’m not talking about just a handful of people in an isolated corner of the country. I’m talking about millions of Americans from every one of our states.”

Additionally, economists expect the unemployment benefits extension to have a strong stimulative impact on the economy, as the recovery lags and a growing band of experts calls for more government spending to keep up demand. Lawrence Mishel, the head of the Economic Policy Institute, estimates that the unemployment benefits extension will support 800,000 jobs over the remainder of the year — as the unemployed generally spend their unemployment benefits immediately, rather than using them to pay down debt or to keep as savings. Unemployment benefits usually end up costing the government only about 40 percent of the sticker price, Mishel said on a call with reporters on Monday. “[Passing the unemployment extension] is not only a decent thing to do. It’s one of the most stimulative things you can do to create jobs,” he noted.

But Republicans have argued that unemployment benefits should no longer be considered emergency spending, in which case they would not be allowed to raise the deficit. “We’ve offered ways of paying for these programs, and we’ve been eager to approve them,” argued Senate Minority Leader Mitch McConnell (R-Ky.). “But we can’t support job-killing taxes and adding tens of billions to the already unsustainable national debt. So the only reason the unemployment extension hasn’t passed is because Democrats simply refuse to pass a bill that doesn’t add to the debt. That’s it. That’s the only difference between what they’ve offered and what we’ve offered.” A number of Republican senators — including McConnell and Sen. Scott Brown (R-Mass.) — introduced unemployment bills with offsets.

Over the weekend, President Obama joined the Democratic caucus in hitting at Republicans for blocking the benefits for so long. Never in U.S. history have extended benefits been allowed to expire with unemployment over 7 percent. He devoted his Saturday radio address the topic. And, speaking in the Rose Garden on Monday, flanked by three unemployed Americans, Obama said: “[Republicans] say we shouldn’t provide unemployment insurance because it costs money. So after years of championing policies that turned a record surplus into a massive deficit, including a tax cut for the wealthiest Americans, they’ve finally decided to make their stand on the backs of the unemployed. They’ve got no problem spending money on tax breaks for folks at the top who don’t need them and didn’t even ask for them; but they object to helping folks laid off in this recession who really do need help.”