Unemployment benefits deal, already DOA in House, hits Senate floor
The Senate begins debate Monday on a bill to extend emergency unemployment benefits that looks headed for passage after months of disagreements over the cost and procedural matters that delayed a compromise between Democrats and Republicans.
But 10 senators were finally able to come up with a bipartisan agreement earlier this month that will extend benefits for five more months, and retroactively send checks to people whose benefits ran out when the program expired on Dec. 28.
The measure got a strong bipartisan vote of 65 to 34 when lawmakers voted to proceed to debate last week, with 10 Republicans joining all 55 Democrats and independents. But even if the measure clears the Senate, it faces an uncertain future in the House.
House Speaker John Boehner, R-Ohio, has argued that the bill is "not implementable," letter he received from National Association of State Work Force Agencies (NASWA), which says the requirements of the Senate bill would cause delays in implementation rack up increased administrative costs and challenges.
"State directors are saying we don't know who went back to work... we'd have to send checks to everybody," Boehner said at a press conference last week. Putting the onus on the Democratic-led Senate to modify the legislation even further, he said, "I told the president I would consider this as long as it was paid for and as long as there are provisions that help improve the economy."
The administration pushed back against the NASWA complaints with a letter from Labor Secretary Thomas Perez contending that issuing retroactive benefits wouldn't be a problem.
"Prior extension of EUC benefits have included retroactive payments for those who lost benefits during the lapse," he wrote. "In prior iterations of EUC where there has been a gap in the program, we have successfully overcome this challenge, and the [Labor] Department already has guidance on how to carry out such a directive."
The Senate bill pays for the benefit extension by using a combination of spending reductions that include "pension smoothing," - a method that allows companies to use historic interest rate averages to calculate pension contributions -- extending certain customs user fees, and allowing single-employer pension plans to prepay their flat rate premiums to the Pension Benefit Guaranty Corporation.
Other offsets will draw on ideas from various lawmakers that should help guarantee support for the bill. It borrows a provision from Sens. Tom Coburn, R-Okla., and Jon Tester, D-Mont., that ends unemployment insurance payments to any individual whose adjusted gross income in the preceding year was $1 million or more (0.03 percent of filers in 2010, according to the bill's authors), as well as ideas from Sen. Susan Collins, R-Maine, to strengthen programs that will give more individualized aid to the long-term unemployed.
In addition to Sens. Jack Reed, D-R.I. and Dean Heller, R-Nev., the lead negotiators, the bill is being cosponsored by Collins and Sens. Rob Portman, R-Ohio; Lisa Murkowski, R-Alaska; Mark Kirk, R-Ill.; Jeff Merkley, D-Ore.; Cory Booker, D-N.J.; Sherrod Brown, D-Ohio; and Dick Durbin, D-Ill.
So far, about 2.2 million people have lost their benefits since the program ran out at the end of last year. According to an analysis by Democrats on the House Ways and Means Committee, the U.S. economy lost $4.7 billion in the first three months of the year because unemployed Americans have less money to spend.