Unemployment Benefit Extension Stalls in U.S. Senate

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Just in case you thought any of them understand the monetary system.

Truly the blind leading the blind.

Unemployment Benefit Extension Stalls in U.S. Senate

By Brian Faler

Oct. 21 (Bloomberg) — Legislation to extend unemployment
benefits is stalled in the U.S. Senate amid a partisan dispute
over how to finance the plan,
among other issues.
Republicans are blocking the measure that would extend
benefits by as much as 20 weeks because they want votes on
several amendments, including on how to pay for the $2.4
billion measure
so it doesn’t add to the federal budget
deficit. Democrats plan to finance the aid by extending an
employer payroll surtax
due to expire at the end of this year.

Senator Dick Durbin of Illinois, the chamber’s second-
ranking Democrat, said the unemployment benefit extension is
being delayed because Republicans are demanding votes on
unrelated issues such as immigration.

‘Pertains to the Subject’

Arizona Senator Jon Kyl, the No. 2 Republican, said his
side wants amendments on “stuff that pertains to the subject –
-how do you pay for it, for example.” He said the measure has
been further delayed by Democrats’ decision to take up a
measure that would scrap scheduled cuts in Medicare
reimbursements to doctors.

Pelosi, a California Democrat, met behind closed doors
today for four hours with economists Mark Zandi, Alan Blinder

and others to discuss possible measures to boost the economy.

She said proposals under consideration include expanded
subsidies to help the jobless buy health insurance, tax breaks
for money-losing companies and increased funding for food

She said the measures won’t be compiled into a second
stimulus package. Instead, lawmakers plan to attach them to
other pieces of legislation moving through Congress such as the
annual appropriations bills funding government agencies, she
told reporters.

No New Stimulus Package

“We do not have plans for an additional stimulus package,
but we do have plans to stimulate the economy in the work that
we are doing,” said Pelosi.

The House approved legislation in September that would
extend benefits for 13 weeks in 27 states with unemployment
rates topping 8.5 percent. Democrats said they had hoped to
forward the bill to President Barack Obama by the end of last
month, before an estimated 400,000 Americans exhausted their

At first, the Senate vote was delayed by 17 Democrats who
objected their states would be excluded under the House plan.
They agreed to accept a revised Senate plan extending benefits
by 14 weeks in all states, with an additional six weeks for
states with jobless rates of at least 8.5 percent.

Democrats are divided over what to do about the $8,000 tax
credit for first-time homebuyers set to expire at the end of
next month.

Expanded Tax Credit

Senate Banking Committee Chairman Christopher Dodd, a
Connecticut Democrat, has proposed a $17 billion plan that
would extend and expand the plan until June 2010. Dodd’s
proposal, cosponsored by Georgia Republican Senator Johnny
Isakson, would expand the credit to all homebuyers and increase
those eligible to couples earning as much as $300,000. Isakson
is pushing to attach the plan to the Democrats’ unemployment
aid bill.

Senate Finance Committee Chairman Max Baucus, a Montana
Democrat and the chamber’s chief tax writer, said today he
opposes the Dodd-Isakson proposal, saying any extension should
continue to be limited to first-time buyers. He said the break
should be extended until mid-2010 and financed with offsetting
savings so it doesn’t add to the government’s $1.4 trillion

“We are going to pay for things around here,” said

House Majority Leader Steny Hoyer, a Maryland Democrat,
favors a one-month extension of the tax credit to be financed
with offsetting savings, said spokeswoman Katie Grant.

Cost Billions

Extending such provisions would cost billions, while
letting them lapse may be difficult because the unemployment
rate is higher than when the stimulus plan was approved.
national unemployment rate last month was 9.8 percent, the
highest since 1983, while the share of unemployed who have been
jobless for at least six months reached the highest level in at
least a half- century. More than 5.4 million people have been
unemployed for at least 27 weeks, according to the Labor

About 1.3 million people will exhaust their benefits by
the end of the year, according to the National Employment Law

Federal Reserve Chairman Ben Bernanke said earlier this
month that economic growth next year probably won’t be strong
enough to “substantially” bring down the unemployment rate,
which may remain above 9 percent through the end of next year.