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House votes to extend jobless benefits

Bill would help 100,000 in Massachusetts

‘We had more time to get this right, and should have sent a stronger bill to the Senate,’ said Michael Capuano of Somerville. ‘We had more time to get this right, and should have sent a stronger bill to the Senate,’ said Michael Capuano of Somerville.
By Matt Viser
Globe Staff / May 29, 2010

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WASHINGTON — The House voted yesterday to extend unemployment benefits and fund more summer jobs, while raising taxes on hedge fund managers and venture capitalists.

The grab-bag legislation, which includes several spending measures and a variety of tax changes, passed in a 215-to-204 vote largely along party lines.

“I am pleased the House passed this bill extending a variety of job-creating programs and assistance to those who are still struggling to find work,’’ said Richard Neal, a Springfield Democrat and key member of the House Ways and Means Committee.

The extension of unemployment benefits through Nov. 30 would help people out of work at least six months, including nearly 100,000 Massachusetts residents who state labor officials say would lose benefits by the end of July. The measure still needs to be approved by the Senate, whose members have left for a weeklong Memorial Day break.

That means thousands of Bay State residents will have their unemployment checks disrupted once the emergency program expires Wednesday.

State officials estimate that 10,000 Massachusetts workers per week will run out of benefits unless the legislation is enacted, state labor officials said. If the Senate approves the bill and restores the benefits retroactively, those who had benefits disrupted would first get a regular weekly unemployment check, with retroactive benefits sent later.

“We’re concerned that without an extension of benefits, it’s going to put thousands of Massachusetts families in a difficult position,’’ said Joanne Goldstein, state secretary of Labor and Workforce Development.

The benefits extension was the key piece of the $112 billion bill. But approval came only after several turbulent days of negotiations between Democratic leaders, who sought to extend programs from the economic stimulus bill, and party moderates and conservatives, who resisted adding to the federal deficit. Leaders eventually agreed to kill $24 billion in Medicaid assistance to cash-starved states and $7 billion for health insurance COBRA subsidies for laid-off workers.

Republicans contended that the $58 billion in tax increases to partially pay for the measure — including $11 billion from quadrupling to 34 cents the per-barrel tax that oil companies pay into the Oil Spill Liability Trust Fund — are job killers.

Representative Michael Capuano of Somerville was one of 34 Democrats — and the only member of the Bay State delegation — to vote against the bill. He said he supported extending unemployment benefits but voted against the overall package because several key provisions were deleted, including the COBRA extension and additional Medicaid funding for states. He was also concerned about whether a late change in transportation funding would have a long-term impact on Massachusetts and other states.

“The Senate adjourned without considering any of these issues, which means that benefits are going to expire regardless,’’ he said in a statement. “Thus, today’s House action is not the final opportunity to fix these issues. We had more time to get this right, and should have sent a stronger bill to the Senate.’’

The decision to cut payments would leave Massachusetts with a $700 million hole in its budget.

The additional aid could be reinstituted in a separate bill, but governors across the country are facing several weeks of uncertainty, with many budgets, including Massachusetts’, set to go into effect July 1.

The bill also includes a provision that would dramatically raise taxes for venture capitalists.

Massachusetts has the second-highest volume of venture capital investment, surpassed only by California, and some in the venture capital community have been warning that the change would discourage the long-term investments that are vital to the growth of technology, biotech, and other companies.

Senators John F. Kerry, a Democrat, and Scott Brown, a Republican, have opposed that provision and may seek to change it next month.

The bill, however, does include more than $1 billion to fund 300,000 summer jobs, including an estimated 8,000 in Massachusetts.

According to Neal, a variety of other tax-related measures would affect Massachusetts, including:

■ Extending tax deduction for out-of-pocket classroom expenses, claimed by 96,703 teachers in Massachusetts for a total of $24 million in expenditures. It would also extend the tuition deduction for higher education costs, claimed by 115,251 families in Massachusetts and totaling $301 million in expenses.

■ Extending a research and development tax credit that has been claimed by 2,043 businesses in Massachusetts.

■ Extending an employment credit for hiring Native Americans that has been used by 233 Massachusetts businesses.

Globe reporter Robert Gavin contributed to this report. Material from the Associated Press was also used. Viser can be reached at maviser@globe.com

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