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Jobless aid measure clears Senate hurdle

By Andrew Taylor
Associated Press Writer / March 9, 2010

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WASHINGTON—Legislation to give additional months of unemployment benefits to people who have been out of a job for more than half a year cleared a key hurdle Tuesday that guarantees it will soon pass the Senate.

The sweeping bill also would prevent doctors from absorbing a crippling cut in Medicare payments and extends health insurance subsidies for the unemployed through December. It would add $132 billion to the budget deficit over the next year and a half.

Eight Republicans voted with Democrats to defeat a GOP filibuster of the measure, setting up a final vote on Wednesday.

The measure illustrates the great extent to which direct help for the jobless and the poor makes up a large portion of Democrats' election-year agenda on jobs -- and that it threatens to squeeze out other items on that agenda amid concerns about a budget deficit projected at a record $1.6 trillion this year.

Democrats also hope this week to separately finish work on a far smaller job-creation measure blending additional highway spending with new tax breaks for companies that hire the unemployed. The Senate could clear the measure for President Barack Obama's signature by Friday.

Tuesday's larger bill also provides the annual extension of $26 billion worth of tax breaks for businesses and individuals that are popular with senators in both parties.

The $66 billion cost of providing the extended unemployment checks is added directly to a budget deficit expected to hit $1.6 trillion this year. In states with the highest jobless rates people are eligible to receive benefits for up to 99 weeks. A 65 percent health insurance subsidy for the unemployed under the COBRA program adds about another $10 billion. Federal cash to help states with Medicaid adds about $25 billion more.

"Even though these programs may be good for your state, a senator has an obligation to stand up and say 'no more,"' said freshman GOP Sen. George Lemieux of Florida. "No more spending our kids' future. No more bankrupting the promise of this country."

But Democrats said it would be heartless to cut off unemployment benefits for people mired in joblessness after the worst recession in decades. They also say that the unemployment benefits inject demand into the economy, helping to lift it.

"This is not just some technical bill," said Sen. Max Baucus, D-Mont. "This bill helps real people. Failure to enact this bill would cause real hardship. Failure to enact this bill would cost jobs."

The measure closes $29 billion of tax loopholes to help defray its cost, including one enjoyed by paper companies that get a credit from burning "black liquor," a pulp-making byproduct, as if it were an alternative fuel.

All told, the measure would add $107 billion to the deficit over the coming decade. Democrats have labeled most of the bill an emergency measure, exempting it from stricter budget rules enacted just last month.

The bill includes about 60 popular tax breaks for individuals and businesses that expired at the end of 2009. The bill would extend the tax breaks through 2010.

Congress routinely extends the tax breaks each year with large bipartisan majorities. Businesses and tax planners would prefer a more permanent solution, but lawmakers can't agree on how to pay for a longer extension.

The tax breaks include a property tax deduction for people who don't itemize, lucrative credits that help businesses finance research and development and a sales tax deduction that mainly helps people in the nine states without income taxes: Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington and Wyoming.

There is a deduction for college tuition for couples making less than $160,000 a year, and one for teachers who use their own money to buy school supplies. There is a tax credit for community development agencies that invest in low-income neighborhoods, as well as a tax break for restaurant owners and retailers who remodel their stores.