The Senate on Thursday approved a 60-day extension of unemployment insurance benefits for the long-term unemployed, this as the Labor Department reported a surprising spike not only in the number of first-time jobless claims by 24,000, the most since February, but also the number of people continuing to draw long term benefits rose from 4.57 million to 4.64 million.

Only three Republicans joined the Democratic caucus to pass the $18 billion bill, in a vote of 59-38, following weeks of contentious fighting, with the GOP insisting that any extension be paid for with offsets and Democrats insisting that sky-high unemployment necessitated unpaid-for, emergency measures.

Senators also overwhelmingly approved an amendment offered by Sen. John McCain, R-AZ, to put the Senate on record as being against a value-added tax (VAT), on the heels of a speech by White House senior adviser and former Federal Reserve Chairman Paul Volcker in which he told a group in New York that the tax might be more acceptable now. The McCain measure was merely symbolic, called a "Sense of the Senate" resolution, but the strong 85-13 vote sent a message that the VAT is "a massive tax increase that will cripple families."

Republicans have vowed to keep jobless benefits extensions short as Congress heads into this crucial midterm campaign season, thereby highlighting Democrats' additions to the debt. Democrats continued to portray Republicans as cynical and the "party of 'No'."

"We should balance the budget as quickly as we possibly can. But we should not balance the budget in the grips of the worst recession since the Great Depression. Doing that would only put more people out of work," said Senate Finance Committee Chairman Max Baucus, D-MT.

"The question we ought to be asking is what's so wrong with trying to pay for what we're doing?" asked Sen. Tom Coburn, R-OK, who helped lead the charge to find a way to pay for the bill.