Senate Democrats combine jobless benefits, homebuyer tax credit in effort to get GOP support

Senate Democrats are working on a new way to jump-start their stalled election-year jobs agenda while saving unemployment benefits for hundreds of thousands of laid-off workers.

The plan combines in one bill the unemployment benefits with an extension of a popular tax credit for people who buy new homes.

Under current law, homebuyers who signed purchase agreements by April 30 must close on their new homes by Wednesday to qualify for credits of up to $8,000. The bill would give those buyers until Sept. 30 to complete the purchases and qualify for the credit.

Democrats hope to pick up Republican support for the bill by combining the two provisions. They have been trying for weeks to pass an extension of unemployment benefits as part of a larger tax and spending package, but the larger bill died in the Senate last week.

Without an extension, unemployment payments would continue to be phased out for more than 200,000 people a week.

Many Democrats see the benefits as insurance against the economy sliding back into recession. Many Republicans, however, worry that adding nearly $34 billion to the budget deficit will only contribute to the nation's economic problems.

"Both sides have offered ways to address the programs in this bill that we agree should be extended," said Senate Minority Leader Mitch McConnell of Kentucky. "The only difference is that Democrats are demanding that we add the cost to an already unsustainable $13 trillion national debt."

Republicans want to pay for the unemployment benefits with unspent money from last year's massive economic recovery package.

Senate Majority Leader Harry Reid, D-Nev., filed a motion Tuesday to end debate on the bill and force a vote by Thursday — if Democrats can round up the necessary 60 votes to end a Republican filibuster.

"These commonsense solutions to help millions of Americans deserve bipartisan support and should be passed swiftly," Reid said.

The House, meanwhile, overwhelmingly passed a bill Tuesday to extend the deadline for the homebuyer tax credit. House Democrats plan to vote on a bill extending unemployment benefits as early as Wednesday.

House Republicans blocked the unemployment bill Tuesday, denying Democrats the two-thirds majority they needed to pass the bill under a special procedure that limited debate and allowed no amendments. Afterward, the House Rules Committee passed a rule allowing a vote on the unemployment benefits anytime this week with only a simple majority needed for passage.

The measure, which is the same as the one in the Senate bill, would provide up to 99 weekly unemployment checks averaging $335 to people whose 26 weeks of state-paid benefits have run out. The benefits would be available through the end of November, at a cost of $33.9 billion. There are no offsets in the bill, so the cost would add to the budget deficit.

It's a tough vote for some 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 loom in November.

The homebuyer tax credit is a much easier sell. Nearly 3 million taxpayers claimed the tax credit through May 22 — totaling more than $21 billion — according to the Treasury Department.

The National Association of Realtors estimates that 180,000 homebuyers who already signed purchase agreements are likely to miss the Wednesday deadline because mortgage lenders and appraisers were swamped with borrowers trying to get approved by the end of the month.