Unemployment benefits extension clears Senate GOP hurdleBy Andrew Taylor, AP
Tuesday, July 20, 2010
Unemployment benefits extension clears hurdle
WASHINGTON — Legislation to restore unemployment benefits to millions who have been out of work for more than six months broke free of Senate Republican delaying tactics on Tuesday. Senators voted 60-40 to move ahead on the bill, clearing the way for a final Senate vote later on Tuesday. The measure would restore jobless checks for 2.5 million people whose benefits started running out seven weeks ago in a stubbornly jobless economic recovery.
The vote was a modest victory for President Barack Obama and Democrats, whose more ambitious hopes for a jobs agenda have mostly fizzled in the face of GOP opposition in the Senate. A battle has raged for months over whether jobless benefits should be financed with additional federal debt as Democrats want or through cuts to other government programs as most Republicans insist.
The vote came moments after Carte Goodwin was sworn in as a successor to West Virginia Democrat Robert Byrd, who died last month at the age of 92. Goodwin was the crucial 60th senator to defeat a Republican filibuster that has led to a lapse in benefits for 2.5 million people. The Senate gallery was packed with Goodwin supporters, who broke into applause as he cast his “aye” vote.
Two Republicans, Olympia Snowe and Susan Collins of Maine, voted to end the filibuster. Ben Nelson of Nebraska was the lone Democrat to break with his party and vote to sustain it.
After a final Senate vote, the House is expected to approve the legislation and send it to President Barack Obama on Wednesday.
The measure would be the eighth extension of unemployment benefits since July 2008, at a total cost to taxpayers of more than $120 billion. The economy added 882,000 jobs so far this year — but many of those were only temporary positions as the federal government geared up to conduct the U.S. Census.
Economists said it will take at least until the middle of this decade to recoup those losses and drive down the nation’s unemployment rate, now at 9.5 percent, to a more normal 5.5 percent or 6 percent.
About 2.5 million people would receive jobless benefits retroactively, injecting almost $3 billion into the economy once they’re paid out. Millions of others will continue to receive payments that would help prop up consumer demand to the tune of about $30 billion more over the coming year.
“This bill is about jobs because unemployment insurance goes to people who will spend it immediately,” said Sen. Max Baucus, D-Mont. “That would increase economic demand. And that would help support our fragile economic recovery.”
But Republicans say that while they support the benefits extension it should be paid for with cuts elsewhere in the $3.7 trillion federal budget.
“We’ve repeatedly voted for similar bills in the past. And we are ready to support one now,” said Senate Minority Leader Mitch McConnell, R-Ky. “What we do not support — and we make no apologies for — is borrowing tens of billions of dollars to pass this bill at a time when the national debt is spinning completely out of control.”
Democrats tout the economy-boosting effect of unemployment checks since most beneficiaries spend them immediately. But the numbers amount to less than one-quarter of 1 percent of the size of the $14.6 trillion economy, and are far smaller than last year’s $862 billion stimulus legislation. Republicans have blocked Democratic add-ons, such as aid to state governments, that could have meant a greater economic boost.
“It’s too small to have any noticeable impact on the economy’s growth rate,” said Joel Naroff, president of Naroff Economic Advisors. “But the benefits do provide an important safety net for people during these difficult economic times.”
The measure would extend benefits averaging $309 a week through the end of November. Maximum benefits in some states are far higher; in Massachusetts, the top benefit is $943 a week. In Mississippi, the top benefit is just $235.
The White House signaled Monday that the administration may seek another renewal of benefits in November if unemployment remains painfully high.
After initially feeling heat this winter when a lone GOP senator, Jim Bunning of Kentucky, briefly blocked a benefits extension in February, the GOP has grown increasingly comfortable opposing the legislation.
Associated Press writer Jeannine Aversa contributed to this report.
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