Congress weighs tax cuts for wealthy and unemployment insurance for those in need

Unemployment insurance that provides jobless benefits to millions is at risk of running out over the holiday season, while tax cuts to those earning over $200,000 may be extended.

By , Associated Press

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    House Speaker Nancy Pelosi of Calif., speaks during a news conference on Capitol Hill in Washington, Wednesday. Pelosi promised to bring unemployment insurance back to the floor before it expires after Thanksgiving but Senate Democrats won't have time until year-end negotiations.
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Jobless benefits will run out for 2 million people during the holiday season unless they are renewed by a Congress that's focusing more attention on a quarrel over preserving tax cuts for people making more than $200,000 a year.

It's looking iffy at best whether Congress will renew jobless benefits averaging $310 per week nationwide that are presently claimed by almost 5 million people who have been out of work for more than six months.

An extension of jobless benefits enacted this summer expires Dec. 1, and on Thursday, a bill to extend them for three months failed in the House. Democrats brought the bill to the floor under fast-track rules that required a two-thirds vote to pass. Republicans opposed the legislation because they were denied a chance to attach spending cuts, so the measure fell despite winning a 258-154 majority.

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In Thursday's vote, 21 Republicans joined with Democrats in favor. Eleven moderate-to-conservative Democrats opposed the bill.

House Speaker Nancy Pelosi, D-Calif., promised to bring the measure back to the floor after Thanksgiving to try to enact an emergency measure that extend benefits at least through the holidays. But Senate Democrats don't have time; instead, they hope the jobless benefits issue gets addressed in year-end negotiations over taxes and other important year-end legislation.

The most recent effort to renew jobless benefits occupied weeks of the notoriously balky Senate's time and barely advanced with the required 60 votes.

Now, even if there were time, GOP Leader Mitch McConnell of Kentucky would appear to command the votes to block any benefits extension that is not "paid for" with cuts to other programs. Sen.-elect Mark Kirk of Illinois will soon join the chamber, replacing Democrat Roland Burris, which appears to now leave Democrats short of the votes to defeat a filibuster.

Still, the looming expiration of unemployment benefits could put Republicans on the defensive since they'll expire just as debate peaks in the lame-duck session over whether to extend Bush-era tax cuts on individuals with income exceeding $200,000 or for couples making more than $250,000. The tax cuts expire Dec. 31, and Democrats oppose permanently extending the upper-bracket tax cuts, which would cost about $700 billion over 10 years.

"I don't think we want to leave here having fought for tax cuts for millionaires and against unemployment insurance for those that have lost their jobs," spokesman Robert Gibbs said.

"Republicans in Congress are eager to spend lavishly on tax breaks for the fortunate few, but stingy when it comes to helping the middle class make ends meet," said Rep. Ed Markey, D-Mass.

Republicans maintain they're willing to extend the benefits but don't want to add the cost — $12.5 billion for three months — to the nation's $13.8 trillion national debt.

"The fact is, we can both provide this help and pay for it by cutting less effective stimulus spending," said Rep. Charles Boustany, R-La. "That's what we should be debating today."

Added Rep. Mike Pence, the No. 3 Republican in the House: "We're facing a fiscal crisis in this country. If we're going to choose to extend unemployment again we've got to find a way to pay for it."

Every recession since 1950 has featured an extended federal benefits program financed with deficit dollars. That's a precedent Democrats refused to break when battling with Republicans for months earlier this year to extend the program.

Republicans didn't pay any political price for stalling efforts earlier this year to extend jobless benefits that provide critical help to the unemployed — including a seven-week stretch over the summer when jobless benefits were a piece of a failed Democratic tax and jobs bill.

But allowing benefits to expire in the holiday season may draw negative attention to Republicans, especially when measured against their insistence on renewing tax cuts for upper-income taxpayers.

"It's just inconceivable that in the last gasp of this Congress you would turn all your attention to the top 2 percent of wage earners in the country at the same time that middle class families are struggling to hold their families together because of prolonged unemployment," said House Education and Labor Committee Chairman George Miller, D-Calif.

The additional jobless benefits programs began in 2008 under President George W. Bush but were made more generous under last year's economic recovery act. Jobless people are now eligible for up to 99 weeks of benefits in most states. The first 26 weeks of benefits are paid for by states. About 3.8 million are now drawing those state-paid benefits.

Democrats argue that the extended benefits should be paid for with deficit spending because it injects money into the economy. Jobless people immediately spend the cash, they explain.

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