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Senate Democrats Reach Deal on Extending Unemployment Insurance Benefits

WASHINGTON -- Senate Democrats said Thursday they have reached a deal to extend unemployment insurance benefits to the nearly 2 million jobless workers across the country who are in danger of running out of assistance by the end of the year.

The agreement would give an additional 14 weeks of benefits to jobless workers in all 50 states. Workers in states with an unemployment rate at 8.5 percent or above would receive six weeks on top of that.

Senate Majority Leader Harry Reid, D-Nev., tried to bring the measure to a quick vote on the Senate floor, but Republicans objected, saying they needed more time to study the proposal and its costs and possibly offer amendments.

The House last month approved legislation that gives 13 weeks of extended benefits, but only in those 27 states, the District of Columbia and Puerto Rico that have unemployment rates of at least 8.5 percent.

That formula drew opposition from senators, led by Sen. Jeanne Shaheen, D-N.H., from states where the jobless rate doesn't reach the 8.5. percent threshold. They argued that it was unfair to provide added assistance to workers in one state and not in another.

Supporters of extended benefits point to the lingering stagnation of the job market despite signs of economic recovery. The national unemployment rate is now 9.8 percent and is expected to top 10 percent before employers start hiring again.

"As of last month, 15 million unemployed Americans were competing for 3 million available jobs," said Senate Finance Committee Chairman Max Baucus, D-Mont., who brokered the deal with Reid, Sen. Jack Reed, D-R.I., and Shaheen.

"Unemployed workers use these benefits to buy essentials and pay the bills," Shaheen said . "Extending unemployment benefits is one of the most effective actions we can take to stimulate the economy."

States offer 26 weeks of benefits, with the average payment about $300 a week. With federal help, including several measures in the economic stimulus package passed last February, the unemployed in states hardest hit by the recession can receive up to 79 weeks of assistance.

The proposal also contains a provision allowing families receiving food stamps to remain eligible while receiving an additional $25 per week in unemployment insurance benefits approved in the stimulus act.

The negotiators said the additional benefits would be paid for by extending through June 2011 the federal unemployment tax, which costs employers about $14 an employee per year.