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Reid Presses Unemployment Extension as Republicans Demand Offset

Jan. 5 (Bloomberg) -- Senate Majority Leader Harry Reid pressed Republicans to support a three-month extension of emergency longer-term unemployment benefits, something Republicans say they could support only if Democrats find a way to pay for it.

The Senate is due to vote tomorrow to advance a bill sponsored by Democrat Jack Reed of Rhode Island and Republican Dean Heller of Nevada, though it’s unclear the legislation has the votes to pass. In addition to Heller, Reid would need four more Republican votes for the bill to get Senate approval.

“Never with unemployment like this have we even considered not extending them,” Reid, of Nevada, said on CBS’s “Face the Nation” program. Benefits for the long-term unemployed expired on Dec. 28. The program was intended to help jobless people after they exhausted state benefits, typically lasting six months.

In addition to focusing on the need to help struggling job seekers and their families, Democrats are saying the extension will buffer the economy since the jobless will immediately pour the money into purchases of goods and services. “The gross domestic product would be increased by $23 billion,” said Reid. “It’s the right thing to do.”

Senate Democrats have been working to reach a compromise with Republicans on extending the benefits for three months for about 1.3 million long-term unemployed, which the Congressional Budget Office estimates will cost about $6.5 billion.

Broader Agenda

It’s part of a broader economic agenda Democrats are pushing in the new year that also includes raising the minimum wage. The extended unemployment program started in 2008 and at one point provided as much as 99 weeks of benefits -- 26 weeks in benefits in most states and as many as 73 weeks in additional federally-funded emergency relief. It has been renewed 11 times since it was put in place by then-President George W. Bush at the beginning of the financial crisis that triggered the last recession.

Republican leaders want the cost of the program offset with cuts elsewhere in the budget. Kentucky Senator Rand Paul, a possible Republican presidential contender in 2016, has said the benefits serve as a disincentive for people to look for work. Today he said the legislation “needs to be paid for.”

“I’m not opposed to unemployment insurance, I’m opposed to having it without paying for it,” Paul said on ABC’s “This Week.”

President Barack Obama yesterday called on Congress to make the restoration of unemployment benefits a priority as lawmakers return to work this week after a winter recess.

‘Vital’ Support

The renewal of a “vital economic lifeline” should be their “first order of business,” Obama said in his weekly radio and Internet address yesterday before his flight back from Hawaii, where he and his family vacationed.

Obama said continuing the benefits will help mothers afford to feed their children while looking for work, and assist fathers trying to get a job learn a new skill.

“Denying families that security is just plain cruel,” Obama said.

The benefits weren’t part of a deal to fund the government for two years that Democrats and Republicans hammered out before leaving town for the holidays.

Senator Charles Schumer of New York, the chamber’s no. 3 Democrat, forecast political blowback for Republicans who do not support the effort. “They’re going to show themselves so far out of the mainstream, it’s going to hurt them in the election,” Schumer said on ABC.

“The American people support this, Democrats, Independents and Republicans,” said Reid.

Another test of bipartisanship will come as Congress negotiates actual spending levels for each federal agency. Lawmakers have until Jan. 15 to do so.

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