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Senate Votes to Reinstate Jobless Benefits, Block Medicare Payment Cuts

The U.S. Senate agreed to restore jobless benefits to hundreds of thousands of Americans whose unemployment checks were cut off during a partisan debate over whether the cost should be added to the federal deficit.

The chamber approved 59-38 an $18 billion measure that would continue the unemployment benefits until June 2. Also to be extended would be subsidies to help the jobless buy health insurance and a provision blocking scheduled cuts in Medicare payments to doctors. The measure goes to the House, which plans to take a final vote later today.

The bill is designed to buy lawmakers time to negotiate an extension, through the end of this year, of current law that lets people collect as many as 99 weeks of unemployment aid. Benefits were interrupted to more than 200,000 people after Republicans demanded the bill’s cost be financed with savings elsewhere in the budget.

Democrats balked, saying the bill was an emergency and could be financed with borrowed money. They were able to pass the measure after Ohio Republican George Voinovich joined them on a procedural vote to push the legislation to a final vote.

“We should not balance the budget on the backs of unemployed Americans who, through no fault of their own, are struggling to get by in this recession -- they need these unemployment benefits,” said Senate Finance Committee Chairman Max Baucus, a Montana Democrat.

Lawmakers said they needed to extend the benefits until June, longer than initially planned, following disagreements over how to finance a longer-term extension that also will include miscellaneous tax cuts.

Health Care

Part of the problem is that some funds Democrats planned to use to offset the long-term extension’s cost were used instead to finance President Barack Obama’s health-care overhaul.

Lawmakers also adopted, 85-13, a non-binding amendment denouncing the value-added tax, an alternative source of revenue suggested by former Federal Reserve Chairman Paul Volcker and others as a possible solution to the government’s long-term budget woes.

The amendment, offered by Arizona Republican Senator John McCain, declares that such a tax “will cripple families on fixed income and only further push back America’s economic recovery.” McCain is facing a tough primary challenge this year by former congressman J.D. Hayworth.

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

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