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Congress moves to extend jobless benefits

Bills would extend deadline for applying for benefits. Without such a measure, more than 3 million people will run out of benefits by end of March.

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By Tami Luhby, CNNMoney.com senior writer

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NEW YORK (CNNMoney.com) -- Lawmakers in both the House and Senate introduced bills this week to push the deadline to apply for unemployment benefits to as far back as 2011.

Congress last month passed a record-long extension of federally paid benefits, but the law only helps those who exhaust their lifelines by year's end. So while unemployment benefits now run as long as 99 weeks, depending on the state, not everyone will receive checks for that long a stretch.

If the deadline is not extended beyond Dec. 31, one million jobless Americans will lose their benefits in January. Some three million people will stop receiving checks by March, according to the National Employment Law Project.

Some 9 million people currently depend on jobless benefits. The government reported Friday that 10% of Americans are out of work and more than a third have been unemployed for at least six months.

The House bill to expand the benefits lifeline calls for extending the deadline through March 2011 and would continue the unemployment stimulus provisions, including the $25 boost to weekly checks. It would cost as much as $100 billion.

"If we don't pass this legislation before the end of the year, millions of Americans will have no support next year while they try to find another job," said Rep. Jim McDermott, D-Wash. "This extension is an economic lifeline for these families. We need to give them the help they deserve while they look for work."

Every dollar spent on unemployment benefits translates into $1.63 in economic activity, according to Mark Zandi, chief economist for Moody's Economy.com.

House Democratic leaders said they are likely to push for a bill extending the deadline this month.

The Senate bill, meanwhile, would extend benefits through the end of 2010. It would cost up to $90 billion.

"[I]t is vitally important that families not suffer and the unemployment insurance should be a slam dunk obvious thing to do," said Sen. Sheldon Whitehouse, D-R.I.

Democratic leaders in the Senate said they will work with colleagues to find a way to extend the deadline.

Both bills would also provide temporary federal funding of a program that allows workers whose employers have reduced their hours to collect partial unemployment benefits. The bill calls for the federal government to cover the cost for two years. The House bill would cover the 17 states participating in the program, while the Senate bill would extend it to all 50 states.

"It is a cost-effective, proven job saver that helps businesses retain skilled workers and allows workers to maintain their health insurance and retirement benefits through difficult economic times," said Sen. Jack Reed, D-R.I.

The bills' reception in Congress, however, may not be that warm. Although the November extension passed both houses easily, some lawmakers are not as eager to lengthen the deadline.

Saying he was concerned about making businesses shell out more in federal unemployment taxes, House Minority Leader John Boehner, R-Ohio, said Friday that he would have to look at the details of the bill.

"We want to help those who are seeking work," Boehner said Friday. "But we've got to look pretty closely at - at how you extend unemployment and how you do it fairly."

Unemployment has been the focus in Washington, D.C., this week, with President Obama Thursday huddling with 130 business leaders, economists and others to discuss how to jumpstart hiring. Ideas abound for how to deal with the stubbornly high unemployment rate.

One is to give more assistance to the unemployed. Unless Congress acts quickly, those who run out of their 26 weeks of state-paid coverage in 2010 will not receive any additional benefits. The jobless currently receiving extended federal benefits, which are divided into tiers, will stop getting checks once they complete their tier.

In addition, come Jan. 1, workers will no longer receive the $25 boost in benefits or be able to apply for a 65% subsidy to continue their company health insurance coverage under the Cobra program. These benefits, along with the Dec. 31 deadline, are part of the $787 billion stimulus program passed in February.  To top of page

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