Senate Vote to Extend Unemployment Benefits Possible Next Week

Oct. 9 (Bloomberg) -- The U.S. Senate may vote as soon as next week to extend unemployment benefits after Democratic lawmakers resolved a dispute over how to distribute benefits across states with varying jobless rates.

Senate Majority Leader Harry Reid, a Nevada Democrat, announced a compromise plan yesterday that would extend aid to all states for at least 14 weeks. The hardest-hit states, with unemployment rates topping 8.5 percent, would get a 20-week extension.

“This agreement recognizes the need to extend unemployment benefits for workers in every state,” Reid said in a statement. “Our compromise recognizes that workers in the hardest-hit states have even greater challenges finding work and are in the greatest need of assistance.”

Reid said he wants the vote on the measure to occur next week.

The plan would distribute benefits more widely than legislation approved last month by the House that focused only on those states with the nation’s worst unemployment. The House Bill would extend benefits for 13 weeks in states with jobless rates of at least 8.5 percent.

Democrats had said they hoped to forward the House measure to President Barack Obama before 400,000 Americans exhausted benefits at the end of September. The plan ran into opposition, though, from 17 senators whose states would have been excluded.

September’s Figure

The national unemployment rate in September was 9.8 percent, the highest since 1983, according to the Labor Department. Also, long-term joblessness hit the highest level last month in at least a half-century, according to the Labor Department. The share of the unemployed who were out of work for at least six months reached 35.6 percent in September, the most since the agency began keeping statistics in 1948.

More than 5.4 million people have been unemployed for at least 27 weeks, the agency said.

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

“Unemployed workers use these benefits to buy essentials and pay the bills; extending unemployment benefits is one of the most effective actions we can take to stimulate the economy,” said Senator Jeanne Shaheen, a New Hampshire Democrat.

Senator Jon Kyl of Arizona, the chamber’s No. 2 Republican, blocked the agreed-upon plan from coming up for a vote yesterday because he said his colleagues didn’t have enough time to study it.

“I have no doubt that at the appropriate time we’ll be able to work out some kind of agreement,” said Kyl. “But our side is going to need some time to look at it.”

Lawmakers are considering other actions amid the widening job losses.

House Speaker Nancy Pelosi, a California Democrat, said Democrats may extend a $8,000 tax credit for first-time homebuyers that expires Dec. 1. She said lawmakers also are debating whether to expand tax breaks for companies.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net.

To contact the editor responsible for this story: Jim Kirk at jkirk12@bloomberg.net