Jobless benefits dwindle as lawmakers dither

By Tami Luhby, senior writer


NEW YORK (CNNMoney.com) -- Here we go again.

Lawmakers are only hours away from letting federal unemployment benefits and other safety net provisions lapse as House Democrats scramble to find support to extend them before starting a weeklong recess.

The grab-bag bill also contains other pressing measures, such as giving states more Medicaid assistance, adding to infrastructure investments, increasing the Medicare rate paid to doctors, extending tax provisions and lengthening a small business lending program.

But the bill remains stalled with Republicans and some Democrats in both chambers voicing concerns about adding $84 billion to the nation's deficit. House Democratic leadership had hoped to garner support by slashing about $50 billion from the bill on Wednesday evening, but it wasn't enough for certain lawmakers. Also, some House Democrats are concerned about passing legislation that fails in the Senate, as many measures have done this year.

Unable to muster the votes to push back the deadline to file for extended federal unemployment benefits until the end of the year, Congress has resorted to short-term fixes three times in recent months. Democratic leaders may need to do that again if the larger bill, which would lengthen the deadline through November, fails.

More than million could lose out

Some 1.2 million people will run out of their jobless benefits in June if Congress fails to act, according to the National Employment Law Project. Federal unemployment benefits, which last up to 73 weeks, kick in after the state-funded 26 weeks of coverage expire. These federal benefits are divided into tiers, and the jobless must apply each time they move into a new tier.

Nearly 10 million people are collecting unemployment insurance. A record 46% of the 15.3 million jobless Americans have been out of work six months or longer.

"Taking a break without extending the unemployment program will break faith with the millions of jobless workers Congress is leaving behind," said Christine Owens, the law project's executive director.

Also in jeopardy is the 65% federal subsidy for COBRA health insurance premiums, which expires at month's end.

And physicians will see their Medicare payment rates drop by 20% in June if lawmakers don't pass an extension. The bill calls for extending the current structure through 2011.

The measure also would extend through September 2011 emergency funding to states for food stamps and aid for needy families and a subsidized jobs program.

A key provision that many governors and state lawmakers have been anxiously awaiting is $24 billion in additional Medicaid assistance. At least 19 states have already assumed those funds in their fiscal 2011 budgets. If it doesn't come through, they'd have to make even more massive cuts to balance their budgets.

The bill also contains a small but significant measure that would extend small business lending incentives that otherwise would expire this month. The program both eliminates fees that the Small Business Administration normally charges for loans made through the agency, and increases the government guarantees on those loans.

Plus, the bill also reinstates dozens of tax expired provisions for people and companies. These include a business research credit and a sales tax deduction for individuals.

CNN Congressional Producer Deirdre Walsh contributed to this report. To top of page

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