Senators Strike Bipartisan Jobless Benefits Deal

Senators Strike Bipartisan Jobless Benefits Deal
Doug Pensinger/Getty Images

WASHINGTON -- Chalk up one partisan election-year battle that senators seem likely to resolve when they return from recess later this month -- the fight over renewing expired benefits for the long-term unemployed.

Bipartisan Senate negotiators said Thursday that they'd struck a $9.7 billion compromise over the issue, agreeing to a five-month extension paid for by boosting some federal revenues. Approval seemed likely by the Democratic-led Senate when it returns in late March from a weeklong recess. That would throw the issue into the Republican-run House, where its fate is uncertain.

The revived benefits would be retroactive to Dec. 28, when the program expired, ultimately halting emergency coverage to more than 2 million people who've been without jobs the longest.

That holiday season cessation of payments had ignited partisan warfare over an issue that fit neatly into the parties' campaign-season competition over which was best creating jobs and helping families still struggling to right themselves after the Great Recession of 2007-2009. Democrats said opposition by most Republicans underscored GOP indifference to financially stressed families, while Republicans said they wanted an extension to be paid for and to improve federal job programs.

Lawmakers still face seemingly intractable gridlock over other major issues, including proposals to revamp immigration laws and the income tax system.

Sen. Jack Reed, D-R.I., a leading bargainer, said Thursday's agreement would help families and "provide a little certainty to families,
business and the markets that Congress is capable of coming together to do the right thing."

Added another top negotiator, Sen. Dean Heller, R-Nev., "I'm so glad that both Democrats and Republicans have come together on a proposal that will finally give Americans certainty about their unemployment benefits."

Rhode Island had an unemployment rate in December of 9.3 percent and Nevada's was 9 percent -- the two worst rates in the nation.

White House spokesman Jay Carney noted that President Barack Obama has called on Congress repeatedly to approve an extension and said, "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."

Lawmakers said the proposal was fully paid for, with the bulk of the money raised by extending some customs fees through 2024 and delaying some companies' contributions to their pensions, in effect increasing their taxes now but reducing them later. More federal revenue would be raised by letting some companies make earlier payments to the Pension Benefit Guaranty Corp., which guarantees workers' pensions.

The deal would end jobless payments to people earning more than $1 million a year. The lawmakers cited 2010 data showing that 0.03 percent of taxpayers earned over $1 million and received some form of federal or state unemployment benefits.

The agreement also has a provision aimed at improving programs that help the long-term unemployed find new jobs and strengthening how the government verifies that they are eligible for unemployment benefits and assistance in finding jobs.

The measure will need 60 Senate votes to overcome Republican procedural tactics aimed at killing it. But with Democrats having 55 votes -- including two usually supportive independents -- supporters seemed to have a strong chance of reaching that threshold because five Republicans co-sponsored the announced deal.

They were Heller and Sens. Susan Collins of Maine, Rob Portman of Ohio, Lisa Murkowski of Alaska and Mark Kirk of Illinois.

Jobless Americans can qualify initially for state-sponsored unemployment benefits, which generally run for 26 weeks. After that, they can receive emergency federal coverage that lasts from 14 weeks to 47 weeks, depending on how high unemployment is in their state.

When the emergency program expired Dec. 28, 1.3 million people immediately lost those benefits. Since then, an average of 72,000 people weekly exhausted state benefits and couldn't receive emergency coverage, according to the liberal National Employment Law Project, bringing the current total to just over 2 million.

Average weekly emergency benefits last year were $287, the group said.

In December, House Speaker John Boehner, R-Ohio, said Republicans would consider extending emergency benefits "as long as it's paid for and as long as there are other efforts that will help get our economy moving once again."

Boehner spokesman Michael Steel had no immediate comment Thursday on the Senate compromise.

-AP Special Correspondent David Espo contributed to this report.

Increase your money and finance knowledge from home

How to Buy a Car

How to get the best deal and buy a car with confidence.

View Course »

How much house can I afford

Home buying 101, evaluating one of your most important financial decisions.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

I wake, poor and broke,
Take bus, go see employment folk.
Nice man treat me good in there,
Say I need to see welfare.

Welfare say, "You come here no more,
We send cash straight to your door."
Now welfare checks, they make me wealthy,
And Medicaid it keep me healthy!

By and by, I got plenty money,
Thanks to you, American dummy.

March 15 2014 at 11:09 PM Report abuse rate up rate down Reply

Obama needs to sign an executive order to extend unemployment benefits forever.Nobody is going to hire me, and I want money

Pay up, taxpayers!

March 15 2014 at 10:50 PM Report abuse rate up rate down Reply

This is a big mistake. In many cases there are plenty of available jobs, but at lower wages than the unemployed persons had been earning prior to layoff. they are using the extended benefits to hold out for a job that matches their former wage rates.

The problem is that the reality is that they are not going to find those lusher jobs. In many cases the root cause for the layoff was the compensation rates. Extended benefits allows these people to continue to be unrealistic in their expectations. It is a cruel reality, but better to face it than sweep it under the rug with these extended payments.

March 15 2014 at 8:55 AM Report abuse -3 rate up rate down Reply

Where is Wall Street's wealth going? Not the economy
Corporate profits and share prices are at all-time highs, but companies have been tightfisted with their cash, reluctant to hire more workers or invest in new equipment.

U.S. publicly traded companies are rolling in dough, but most of the cash isn't going anywhere near the broader economy.

Until the logjam of demand breaks, that cash is likely to stay mostly where it is: close to home.

It's a bitter irony of the recovery from the worst economic crisis since the Great Depression. Stocks are hitting all-time highs even as the labor market remains weak. The well-off are doing just fine, but for a large swath of the nation, the recession never really ended.

Indeed, some polls show that up to 80 percent of Americans think the U.S. is still in recession even though it was officially declared dead almost five years ago.

Goodbye, labor

That misconception makes a lot of sense when you consider that business in many ways has never been better in part because so many people have been laid off. Indeed, wages are the single-largest corporate cost, so when companies need to pare expenses, the first thing they do is fire employees.

InvestorPlace: How Washington & Wall Street affect your wallet

That's why a stock rallies when a company says it's canning people. Lower costs mean fatter margins, and fatter margins mean bigger profits -- even if revenue is stagnant (more on this in a minute.)

The result is that stocks are at all-time highs partly because corporate profits are at record highs, closing in on nearly $1.9 trillion.

March 15 2014 at 12:49 AM Report abuse rate up rate down Reply
1 reply to republicanslostagain's comment

At the same time, nearly 9 million jobs were lost in the recession and its aftermath, according to the Bureau of Labor statistics. More than 10 million people are still unemployed today. First-time claims for unemployment insurance routinely top 300,000 a week, and layoffs are still happening at a pace of 1,600 per quarter.

Most alarming is that when you use the broadest measure of joblessness -- which counts marginally attached workers and part-timers who want full-time work -- the unemployment rate stands at 12.7 percent, according to the BLS.

Add in stagnant wages, and it's abundantly clear that corporate cash isn't going to workers, and by extension the wider economy. The rub is that unemployment tamps down demand, and without demand, there's no reason for companies to invest in their businesses and hire workers.

It's a vicious cycle: No work means no demand; no demand means no work.

And it's been this way for years. S&P 500 ($INX -0.28%) revenue growth hit just 0.8 percent in the most recent quarter, according to data from FactSet. Indeed, S&P 500 revenue has been stuck in the very low single digits for years. Publicly traded companies have to show profit growth, quarter after quarter and year after year, and the easiest way to do that is to . . . anyone? Anyone?

Fire more workers.

Capital expenditures take a hit, too

The lack of demand shows up in investment, too. Companies stopped spending as much to expand their businesses because there was no one to sell stuff to, although that appears to be changing a bit.

At its peak in 2008, capital spending hit $1.4 trillion, according to the Census Bureau. It picked up again in 2010 to 2011 (last year for which data are available) but it was still only $1.2 trillion:

In another vicious cycle, a lack of capital spending means more unemployment, since structures and equipment don't need to get built amid weak demand.

More hopefully, there are indications that capital expenditures are starting to grow significantly again. Companies are using almost 79 percent of capacity, according to data from the Federal Reserve. When they get close to 80 percent capacity utilization, that's when they start to get nervous about needing to add more capacity. It's like filling your gas tank when it’s four-fifths empty. You've got some mileage left, but it's more important that you not run out of gas.

Still, if all that corporate dough isn't going to workers or business investment, then just where the heck is it going?

The vault

Well, plenty of it is sitting in corporate coffers.

Non-financial companies are sitting on more than $1.9 trillion in liquid assets -- roughly equivalent to the GDP of Mexico with 120 million people. True, a lot of that is in Treasurys or commercial paper (cash equivalents), but it still counts as money not being deployed in something tangible and useful that would boost hiring.

March 15 2014 at 12:55 AM Report abuse rate up rate down Reply

Time to send the republicans home for good. They do not want to help America, just their own party.

March 14 2014 at 9:59 PM Report abuse rate up rate down Reply
1 reply to toosmart4u's comment

toosmart,yeah,the Dem are doing so good,this country is in the biggest mess ever witnessed by Americans.

March 14 2014 at 10:05 PM Report abuse -2 rate up rate down Reply
1 reply to wayne8734's comment

Sorry,......the economic collapse of 2008 is the worst economic crisis we had since the Great Depression.

March 14 2014 at 10:21 PM Report abuse -1 rate up rate down

More welfare unemployment benefits. Deadbeats will be so happy.

March 14 2014 at 9:31 PM Report abuse -5 rate up rate down Reply
1 reply to betty_brock's comment

Calling people who lost their jobs no fault of their own , Deadbeats ? No wonder the TPGOP are so out of touch with people. To bad you don't stand in front of these folks and call them deadbeats to their face.

March 14 2014 at 10:04 PM Report abuse +2 rate up rate down Reply
3 replies to republicanslostagain's comment

Did you mean ; " While you're watching " ?

Sorry I did not know you were were in charge of English class today. : /

March 14 2014 at 4:41 PM Report abuse rate up rate down Reply

" true_liberal
Hasn't cash always been accepted in pretty much every geographical area? How is a geographical area set up specifically to cater to cash transactions?

And how did you get dumb enough to imagine the demand for goods and services that might come from foreign visa workers doesn't create jobs if those purchases are made with cash instead of a credit card ? "

Next time ICE or other Federal Agency announces arrests you can ask them the same questions and brow beat them.

March 14 2014 at 4:22 PM Report abuse rate up rate down Reply

What would be good for this country is to have democratic control of the house. The GOP does not care about America, they only care about the GOP.

March 14 2014 at 3:50 PM Report abuse +1 rate up rate down Reply
Yo Hinck

The heartless people both political and personal have got to stop hating those in is no fun to live in poverty, where you can't feed yourselves or your children never mind paying your bills.
Where will the hatred get us? More homeless, more crime and a weaker economy for starters...I don't know about any of you but I would much rather pay more in taxes now to prevent these from happening later.
Go figure, it is those who are living from paycheck to paycheck who seem to be the most heartless of all...they stick up for the wealthy and vote against their own best interest. SMH!!!

March 14 2014 at 3:32 PM Report abuse rate up rate down Reply