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Thousands in Mass. could lose jobless aid next week

By Robert Gavin and Matt Viser
Globe Staff / May 27, 2010

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Nearly 100,000 Massachusetts residents would lose unemployment benefits by the end of July if Congress fails to extend an emergency program that has allowed laid-off workers to collect checks for up to almost two years, according to state labor officials.

The program, enacted as part of last year’s stimulus bill, is set to expire Wednesday, and with concerns about the federal deficit mounting on Capitol Hill, it is unclear when Congress will act on a $145 billion spending bill that extends emergency benefits through November.

If the emergency benefits expire, state officials said, unemployed Massachusetts workers would start losing benefits at the estimated rate of 10,000 a week, starting next week.

“A lot of people and families are going to be without this needed weekly income,’’ said Joanne Goldstein, the state’s secretary of labor and workforce development.

With the weeklong Memorial Day recess looming, leaders of the Democrat-controlled Congress were scrambling to take up the spending bill, which not only extends health insurance subsidies for laid-off workers, but also fixes a glitch that penalized workers who took part-time or temporary jobs while collecting unemployment.

The House is expected to take up the measure today. The focus will then shift to the Senate, where Senator Scott Brown of Massachusetts said yesterday he will oppose the spending bill.

“I cannot support the extender bill as currently constructed because it includes nearly $150 billion in tax increases and deficit spending,’’ Brown said. “While there is no question we should temporarily extend unemployment benefits to provide for our neediest during a down economy, we must do it without taxing or resorting to more borrowing.’’

Republicans, who have criticized the bill for adding to the federal deficit, can block the legislation from coming to a vote.

Both Brown and Senator John F. Kerry, a Massachusetts Democrat who supports the bill, oppose a provision that would dramatically raise taxes for venture capitalists and other investors. Massachusetts has the second-highest volume of venture capital investment in the country, surpassed only by California, and some in the venture community are warning that the change would discourage the long-term investments that are vital to the growth of technology, biotech, and other companies.

In a statement, Kerry said Congress needs to act on the spending plan before the emergency unemployment benefits program expires.

“Extending unemployment insurance is do or die for a lot of people hanging on by their fingernails,’’ he said. “There is no more time to lose. People expect Washington to get it together because this is bigger than politics.’’

The uncertain future of the extension program is worrying jobless workers like Meryl Minden of Newton, who could need another extension when her current benefits run out in about six weeks. Minden, 48, was laid off from Bank of America in March 2009. She retrained as a paralegal and has been seeking work, but so far without success.

“Things may be picking up, but it’s still a long process to find a job,’’ she said. “People are being put between a rock and a hard place.’’

While labor markets have begun to rebound in the state and the nation, competition for jobs remains fierce. Some 15 million Americans, including more than 300,000 in Massachusetts, are out of work. Many economists say the unemployment rate — 9.9. percent nationally, 9.2 percent in Massachusetts — could still rise this year as workers who gave up looking for jobs in the recession resume searches as conditions improve.

Cynthia Dollar, 51, of Fall River will lose her benefits in a few weeks if they are not extended. Dollar lost her job as a cook in a nursing home in October 2008 and retrained as a truck driver. Since then, she estimates, she has applied for nearly 100 jobs. Her cover letters now include this plea: “I need to work. I need an opportunity to prove myself.’’

“I just have to keep hoping,’’ she said. “The extensions are very important for people who need to find a job. If I don’t have them, how am I going to support myself?’’

The federal spending proposal contains other components that state officials consider vitally important. For example, the federal government has boosted Medicaid reimbursements to help states close budget gaps created during the economic downturn. Those reimbursements are scheduled to expire at the end of this year, but the legislation would extend that funding for another six months at a cost of $24 billion over 10 years.

Governor Deval Patrick and state lawmakers have been counting on about $700 million in Medicaid funding for next year’s budget. If Congress does not approve the additional funds, the state would have to make more cuts to the budget proposal.

In addition, the bill includes more than $1 billion to fund 300,000 summer jobs, including an estimated 8,000 in Massachusetts. That provision has been a major focus of big city mayors, including Mayor Thomas M. Menino of Boston, who have been trying to persuade Brown to support it. Brown had earlier opposed a similar measure because it did not include a funding source.

On Monday, teenagers protested outside Brown’s Boston office, setting up a “Sour Scott Lemonade’’ stand.

The legislation would also amend the system for Medicare payments to physicians. The federal payments to doctors are scheduled to be reduced by more than 20 percent in June, but the legislation would alter the schedule to reduce the impact on doctors until December 2011.

“I can’t overemphasize what a big vote this really is on a whole cluster of things that really matter to Massachusetts,’’ Kerry said.

Further complicating the issue is a $59 billion bill before the Senate to fund relief efforts in Haiti and the wars in Afghanistan and Iraq. It remains unclear whether the Senate’s Democratic leaders can win the Republican votes needed to bring the spending bill to the floor.

In the House, Democrats had been weighing several options to gain support. Last night, in an apparent bid to attract conservative Democrats worried about worsening the deficit, they cut the spending plan significantly.

Another option being discussed is to vote on the most immediate provisions, such as the unemployment benefits extension, and resume debate on the larger bill after Memorial Day.

Gavin can be reached at rgavin@globe.com; Viser at maviser@globe.com.