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Senate Advances Jobless Aid Over Republican Objection

Senator Max Baucus
Senator Max Baucus, Democrat from Montana. Photographer: Andrew Harrer/Bloomberg

July 20 (Bloomberg) -- The U.S. Senate broke a Republican filibuster and moved toward a final vote on legislation restoring unemployment benefits to 2.5 million Americans who lost aid during a dispute over how to pay for it.

The chamber voted 60-40 to end debate on the measure, clearing the way for a final vote as soon as tomorrow. The bill has been held up for weeks by Republican demands that Democrats find savings elsewhere in the budget to prevent the $34 billion in aid from adding to the federal deficit.

Democrats had been one vote short in a previous attempt to extend the aid. Today’s swearing-in of Democratic Senator Carte Goodwin of West Virginia, successor to the late Senator Robert Byrd, gave them the clinching vote.

“It’s such an honor to come to the United States Senate and fill the seat occupied by Senator Byrd,” Goodwin, 36, a former aide to West Virginia Governor Joe Manchin, said after the vote. “But to come on my first day, in my first vote and help out millions of Americans -- it’s really quite an honor.”

Republicans said the measure could have been approved weeks ago if Democrats had agreed to find other funds to pay for it.

Debt Debate

“There’s no debate in the Senate about whether we should pass a bill -- everyone agrees that we should,” said Senate Minority Leader Mitch McConnell, a Kentucky Republican. “This debate is about whether in extending these benefits we should add to the debt or not.”

Maine Senators Olympia Snowe and Susan Collins were the only Republicans to support the bill; Ben Nelson of Nebraska was the only Democrat to oppose it. His state boasts a 4.9 percent unemployment rate, the nation’s third lowest.

Although the House previously approved the measure, it must be passed there again because of minor changes made by Senate Democrats. House Majority Leader Steny Hoyer, a Maryland Democrat, said his chamber would take up the measure as early as tomorrow following Senate passage.

The legislation would extend through November a program offering the long-term unemployed up to 99 weeks of assistance and provide aid retroactively to those whose checks were cut off by the impasse.

It would push total unemployment benefit spending this year to more than $130 billion, a 50 percent increase from last year, according to the nonpartisan Congressional Budget Office.

Abandoned Provisions

Democrats dropped other unemployment assistance provisions amid complaints over the cost, including a 65 percent subsidy created last year to help the jobless buy health insurance through their former employers. It benefited 2 million households last year, according to the Treasury Department.

The measure wouldn’t renew an additional $25 weekly jobless benefit that was part of last year’s economic stimulus. Nor would it extend a tax exemption for the first $2,400 in unemployment aid.

Also, Democrats don’t plan to extend aid to the growing number of Americans who have already received the maximum 99 weeks of allowable aid. A number of other jobs-related provisions, including plans to send additional aid to state governments, that once comprised Democrats’ election-year agenda were jettisoned amid complaints they would add too much to the deficit.

‘Bare Essentials’

“We have stripped this measure down to the bare essentials,” said Senate Finance Committee Chairman Max Baucus, a Montana Democrat.

An April report by a pair of economists at the Federal Reserve Bank of San Francisco said that the aid extensions, which are the longest ever, have contributed to the unemployment rate, though the effect was “relatively modest.” It estimated the jobless rate at the end of last year would have been 9.6 percent, rather than 10 percent, without the extensions.

A study by Goldman Sachs Group Inc. last month said the earliest Congress allowed extended unemployment benefits to lapse during an economic recovery was in 1978 and 1985, when the jobless rate in each case was 7.4 percent -- a figure the nation won’t see again before 2012, according to CBO.

White House spokesman Robert Gibbs said yesterday the current extension probably won’t be the last. “I think it is fair and safe to assume that we are not going to wake up at the end of November and find ourselves at a rate of unemployment that no one would consider not to be still in an emergency,” Gibbs told reporters.

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

To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net

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