March 13 (Bloomberg) -- Senators reached an agreement that would restore benefits for the long-term unemployed that expired late last year, Rhode Island Democrat Jack Reed announced.
The deal, struck today by Reed, Nevada Republican Dean Heller and eight other senators, would reauthorize emergency unemployment benefits for five months.
The cost of the benefits would be covered by extending so-called pension smoothing, which was set to phase out this year. That maneuver would give companies more time to make payments to pension funds, meaning their short-term taxable income would rise because they could claim fewer deductions.
Other offsets include extending customs user fees through 2024 and allowing single-employer pension plans to prepay their flat-rate premiums to the Pension Benefit Guaranty Corp.
President Barack Obama has pressed lawmakers for months to reach a compromise on extending the aid. The measure agreed to by the senators would be retroactive to Dec. 28 when the emergency benefits expired for about 1.6 million Americans.
“This is not just the right thing to do for these Americans looking for work, it’s the right thing to do for our economy,” White House Press Secretary Jay Carney said in a statement praising the accord.
Senate Majority Leader Harry Reid, a Nevada Democrat, told reporters earlier today that the chamber would act on the measure after returning from next week’s break.
The Congressional Budget Office said in a preliminary estimate that the emergency benefits would cost almost $9.9 billion while cutting the deficit by almost $9.4 billion through 2019. That’s because prepayment of Pension Benefit Guaranty Corp. premiums would generate almost $18.4 billion in extra revenue over the next five years.
The last time Democrats tried to act on this issue, they pressed for three months of benefits. The bill, S. 1845, stalled when backers didn’t have enough support to cut off debate. The Feb. 6 vote was 55-43.
Republicans have opposed previous Democratic proposals to cover the cost of extending the benefits.
This time, Reed and Heller said they were confident they would have more than enough votes to advance the measure.
Co-sponsors of the compromise measure include Republicans Susan Collins of Maine, Rob Portman of Ohio, Lisa Murkowski of Alaska, Mark Kirk of Illinois, and Democrats Jeff Merkley of Oregon, Cory Booker of New Jersey, Sherrod Brown of Ohio and Majority Whip Dick Durbin of Illinois.
“There are a lot of good people looking for work and I am pleased we’re finally able to reach a strong, bipartisan consensus to get them some help,” Reed said in a statement.
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