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Thursday, May 27, 2010 6:34 PM UTC

Conservative Dems balk at jobless benefits package

Lawmakers try to push vote ahead of Memorial Day recess

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Topics: Unemployment, U.S. Economy, U.S. House of Representatives, U.S. Senate,

Democrats struggled Thursday to extend jobless benefits for people who have been out of work for long stretches as lawmakers worried about the growing budget deficit balked at a scaled down package.

House leaders had scheduled a vote Thursday on a bill that would extend the benefits through November, but they ran into opposition from Republicans and some Democrats concerned about the cost of the overall bill.

“They need to go back to the drawing board,” said Rep. Henry Cuellar, D-Texas, a member of the conservative Blue Dog coalition.

Coalition members are unhappy with that the bill would add $84 billion to the budget deficit. They met with House Majority Leader Steny Hoyer Thursday morning, but were unmoved.

“We have serious reservations,” said Rep. Dennis A. Cardoza, D-Calif. “There are many small sticking points.”

Across the Capitol, Senate Democrats had far better success in advancing an almost $60 billion measure to pay for President Barack Obama’s troop increase in Afghanistan.

The 69-29 test vote sets the stage for a final vote as early as Thursday evening. About half the money would cover the 30,000 additional U.S. troops in Afghanistan. The bill also includes $5 billion to replenish disaster aid accounts, and there’s money for Haitian earthquake relief and aid to U.S. allies in the fight against terror.

If Congress doesn’t extend the unemployment benefits, thousands of people would begin to lose jobless benefits when an extension of unemployment insurance expires next week. A 65 percent subsidy for health insurance benefits for the unemployed under the COBRA program also expires.

Senate Republican Leader Mitch McConnell of Kentucky said the “real emergency” is the growing national debt, which just hit $13 trillion.

“And even some Democrats seem to agree with me,” McConnell said Thursday. “That’s why we’re seeing a quiet revolt over in the House on this bill.”

The benefits are part of a sweeping package of unfinished business that lawmakers hope to complete before their Memorial Day recess.

Democratic leaders cut the package of spending and tax cuts Wednesday by about $50 billion — to $143 billion — in an attempt to pick up votes.

It’s a tough vote for lawmakers who want to help constituents hit hard by the recession but are wary of being labeled big spenders. The economy is starting to pick up, but unemployment is still high as the nation continues to struggle from the loss of more than 8 million jobs. At the same time, angst over deficit spending is growing as midterm congressional elections near in November.

Time is running short for the House to vote because the bill still has to go to the Senate, which can take days to act. Senate leaders have said they are confident they will have the votes to pass the bill. But some House members are wary of voting for an expensive package, only to have it languish on the other side of the Capitol.

“Unemployment’s too high, too many people can’t find jobs and obviously we have to act,” said Hoyer, D-Md. “But there is still great concern about spending levels.”

The expanded jobless benefits provide up to 99 weeks of payments in many states, at a cost of nearly $40 billion. The benefits are part of a bill that includes a one-year extension of about 50 popular tax breaks that expired at the end of last year and a delay in scheduled cuts in Medicare payments to doctors.

Subsidies to help laid-off workers pay for health insurance would continue through November, at a cost of $7 billion. States would get $24 billion to help cover Medicaid costs.

The cost of the bill would be partially offset by tax increases on investment fund managers, oil companies and some international businesses. The tax increases total about $57 billion over the next decade. Changes giving underfunded pensions more time to improve their finances would raise $2 billion.

The original package unveiled last week would have extended unemployment benefits through December and delayed a 21 percent cut in Medicare payments until 2014. The pared-down bill would delay the Medicare cuts until 2012, when lawmakers would have to address the issue again.

——

Associated Press writer Andrew Taylor contributed to this report.

More Stephen Ohlemacher.

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