Effort to Renew Jobless Aid Stalls on Republican Concerns

Photographer: Andrew Harrer/Bloomberg

U.S. Senate Minority Leader Mitch McConnell, a Republican from Kentucky, takes an elevator at the U.S. Capitol in Washington, D.C., on Jan. 9, 2014. Close

U.S. Senate Minority Leader Mitch McConnell, a Republican from Kentucky, takes an... Read More

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Photographer: Andrew Harrer/Bloomberg

U.S. Senate Minority Leader Mitch McConnell, a Republican from Kentucky, takes an elevator at the U.S. Capitol in Washington, D.C., on Jan. 9, 2014.

Congressional negotiations on reviving U.S. unemployment benefits for the long-term jobless were dealt a setback as Democrats and Republicans sparred over how to pay for the aid and how long it should be extended.

Republicans yesterday expressed opposition to Senate Majority Leader Harry Reid’s plan to renew the benefits through mid-November and frustration that he won’t let changes be offered on the chamber’s floor.

“I don’t think it’s irreparable,” New York Senator Charles Schumer, the chamber’s third-ranking Democrat, told reporters. “I would like to see us come back together over the weekend.”

Democrats need support from at least five Republicans to restore expanded unemployment benefits that ran out Dec. 28 for 1.3 million Americans. The latest proposal may not have moved Democrats any closer to getting the votes they need.

Republicans who have been working with Democrats to find a compromise said they were disappointed by Reid’s plan, which they said he didn’t run by them before announcing it.

“We are just learning today what is in the sort of take-it-or-leave-it proposal,” said Ohio Senator Rob Portman, one of six Republicans who voted Jan. 7 to advance the bill. “My hope is we still can come up with a solution here.”

‘No Agreement’

Senate Republican leader Mitch McConnell’s spokesman Don Stewart said in a posting on Twitter after Reid’s statement that there was “still no agreement” among leaders.

Reaching an accord on the benefits “requires getting us past short-term politics,” Senator Chris Coons, a Delaware Democrat, said on MSNBC today.

He said a renewal of benefits could be paid for by “extending long-term cuts of sequester.”

“We should be able to come together,” Coons said.

One sore point for Republicans was that after initial talks focused on extending the lapsed benefits for three months, Reid’s plan would keep the aid in place for most of the year.

Reid touted his proposal as meeting Republican demands that the price tag would be covered by budget reductions.

“We believe this is a sound and balanced proposal,” Reid, a Nevada Democrat, said on the Senate floor yesterday.

Those expressing skepticism about the longer package included Republican Senators John McCain of Arizona and Lisa Murkowski of Alaska.

Republican Amendments

Republicans bristled at Reid’s position on amendments.

“Is it the majority leader’s intent to allow votes on any Republican amendments?” McConnell asked on the floor yesterday.

“The answer to your question is no,” Reid responded.

Still, those involved in the talks, including Portman and Schumer, said they want to continue negotiations into the weekend.

Reid said his proposal would partially cover the cost of benefits with a one-year extension of federal spending cuts, known as sequestration. It also would eliminate some “double-dipping” by people eligible for both unemployment and disability insurance, he said. That aspect of the plan is a revision of proposal put forth by Portman.

Any extension of the sequestration cuts would occur toward the end of the decade. In past disputes, Republicans have objected to up-front spending offset by far-off spending cuts.

CBO Estimate

The Congressional Budget Office estimated that Reid’s plan would cost the government $17.1 billion over the next 10 years. Reid has said the plan is fully funded. The largest spending cut -- a one-year extension of cuts to some programs, would occur outside the 10-year budget window. The cut would save the government $18.1 billion in 2024 and 2025.

Democrats earlier proposed a three-month extension of the jobless benefits, costing $6.4 billion, as emergency aid without offsetting the cost.

The push to revive the benefits marks the start of the Democrats’ election-year focus on income inequality. Democrats also will seek to raise the federal minimum wage and increase spending on infrastructure projects to create jobs.

House Speaker John Boehner, an Ohio Republican, said Jan. 8 that the chamber -- controlled by his party -- would consider an extension of benefits “if it was paid for and if there were provisions that we could agree to that would get our economy moving again and put the American people back to work.”

House Minority Leader Nancy Pelosi, a California Democrat, said Republicans are “moving the goal posts” on what they are seeking. Extending the benefits would stimulate the economy, she said.

‘Spent Immediately’

“This money is spent immediately, injecting demand into the economy and creating jobs,” Pelosi said.

House Democrats tried and failed yesterday to force a vote on extending unemployment insurance without a way to pay for it. The move was blocked on a 226-191 vote.

The expanded program started in 2008, when the U.S. jobless rate was 5.6 percent, and at one point provided as many as 99 weeks of benefits for the long-term unemployed. At the end of 2013 the maximum was 73 weeks, including 26 weeks of state-funded benefits.

The national jobless rate in November was 7 percent.

The emergency benefits have been renewed 11 times since President George W. Bush put them in place. All extended benefits are covered by federal dollars, while initial jobless insurance comes from federal, state and employer funds.

The Senate bill is S.1845.

To contact the reporter on this story: Kathleen Hunter in Washington at khunter9@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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