WASHINGTON (AP) - Jarred by new jobless alarms, Congress raced
to approve legislation Thursday to keep unemployment checks flowing
through the December holidays and into the new year for a million
or more laid-off Americans whose benefits are running out.
The Senate's vote followed Thursday's report that laid-off
workers' new claims for jobless aid had reached a 16-year high and
the number of Americans searching for work had surged past 10
The White House, which had opposed broader legislation
containing the benefits extension, urged passage of the new version
and said President George W. Bush would quickly sign it.
As Congress prepared to leave town - perhaps for the year -
there was no such resolution on helping the auto industry, a
disaster in the making that could lead to hundreds of thousands if
not millions of additional lost jobs. Democratic leaders said they
could return to Washington in mid-December to vote on rescue loans
if the carmakers first present a plan on transforming and
modernizing their operations.
Discouraged by the stalemate over auto aid, investors sent the
Dow Jones industrials down to another big loss, 445 points.
As for the jobless benefits, about 1.2 million people would
exhaust their unemployment insurance by the end of the year without
the extension, sponsors said. The measure is estimated to cost
about $5.7 billion, although economists put the positive impact at
$1.64 for every dollar spent on jobless benefits because the money
helps sustain other jobs and restores consumer confidence.
"Putting money in the hands of unemployed families means they
will be able to pay their rent and utility bills, buy groceries and
clothe their children," Sen. Dick Durbin, D-Ill., said after the
voice vote in the Senate. "It is money that will create economic
growth in America."
The House had approved the bill in October.
More than 1.2 million jobs have been lost so far this year, and
the civilian jobless rate is at a 14-year high of 6.5 percent.
Thursday's Labor Department report said claims for unemployment
benefits jumped last week to 542,000 the highest level since July
1992 and fresh evidence of a rapidly weakening job market that is
expected to get even worse next year.
The legislation as approved would provide seven additional weeks
of payments to people who have exhausted their benefits. Those in
states where the unemployment rate is above 6 percent would be
entitled to an additional 13 weeks above the 26 weeks of regular
benefits. Benefit checks average about $300 a week nationwide.
The benefits provided would be in addition to 13 weeks of
federally funded extended benefits approved by Congress last June.
The vote could wrap up this session of Congress - with the
possibility of the December return. The Democratic leaders' main
condition for that special session was that the Big Three
automakers first present a plan showing how federal aid would help
"Until we can see a plan where the auto industry is held
accountable," said House Speaker Nancy Pelosi, "we cannot show
them the money."
"We are prepared to come back into session the week of Dec. 8
to help the auto industry," Senate Majority Leader Harry Reid
said. "But only if they present a responsible plan that gives us a
realistic chance to get the needed votes."
Congressional Democrats had sought to move legislation that
would direct $25 billion from the $700 billion financial rescue
plan to the automakers to ensure they can stay in business until
the spring. They abandoned those plans this week in the face of
resistance from the White House and Senate Republicans.
The broader economic questions of what further actions
Washington must take to avoid more home foreclosures and rectify
staggered financial markets will probably have to wait until
January, when the new Democratic-dominated Congress will convene
and Barack Obama will be in the White House. An economy-stimulating
package that could run into the hundreds of billions of dollars is
likely to be on the agenda when the next Congress opens.
Treasury Secretary Henry Paulson said Thursday that the
financial crisis now plaguing the world economy is something that
happens "once or twice" in 100 years.
The need to address the deteriorating job situation was one area
that everyone could agree. "The recent financial and credit crisis
has slowed the economy, and it's having an impact on job
creation," White House press secretary Dana Perino said in urging
Congress to pass the benefits extension.
Congress has enacted federally funded extensions seven times in
the past 50 years during economic slumps - in 1958, 1961, 1972,
1975, 1982, 1991 and 2002.
The House also voted in June to extend unemployment benefits for
three months, but that bill stalled in the face of opposition from
Senate Republicans and a White House veto threat.
The Bush administration contends that past extensions occurred
only when the unemployment rate was considerably higher.
Unemployment insurance is a joint program between states and the
federal government that is almost completely funded by employer
taxes, either state or federal.
Before Thursday's quick resolution, the White House had
threatened to veto a broader, $61 billion stimulus bill that would
have helped states maintain Medicaid benefits and extend funds for
public works projects in addition to the extending the jobless
In yet another bad sign for the economy's near future, the
private, New York-based Conference Board said Thursday that its
monthly forecast of economic activity declined 0.8 percent in
October. Over the past seven months, the index has declined at a
4.7 percent annual rate, faster than at any other time since 2001.
Most of the decline was due to the drop in stock prices, a
decline building permits and sagging consumer expectations.
AP Writers Jeannine Aversa, Christopher S. Rugaber, Deb
Riechmann, Ellen Simon and Ken Thomas contributed to this report.
The bill is H.R. 6867.
On the Net:
(Copyright 2008 by The Associated Press. All Rights Reserved.)