U.S. jobless pay measure to move with defense bill

An U.S Army soldier from Task Force Denali 92 MP patrols at Wazi-Zadram village in Paktya province December 11, 2009.

WASHINGTON (Reuters) - Democrats hope to pack a must-pass U.S. defense spending bill with measures to help victims of the ailing economy, Assistant Senate Majority Leader Dick Durbin said on Friday.

But Durbin said his party will need help from Senate Republicans next week to pass the bill because he expects at least some anti-war Democrats to oppose it.

"There are some who, because this is a defense appropriations bill, feel this is a war vote," Durbin told Reuters on Capitol Hill. "They aren't going to vote for the war, directly or indirectly."

Durbin's comments highlighted the tricky politics involved as Congress rushes to finish its legislative work before lawmakers head home for the holidays.

The $630 billion-plus defense spending bill, which funds the wars in Iraq and Afghanistan, normally enjoys support from a broad range of lawmakers.

Congress must pass it by December 18, when a temporary funding measure expires. For that reason, the defense bill is expected to serve as a vehicle for other measures that might not pass on their own.

The bill will contain language that would raise the federal government's $12.1 trillion debt limit by $1.8 trillion to $1.9 trillion, said House of Representatives Democratic Leader Steny Hoyer.

The Treasury Department has said Congress must raise the debt limit by the end of the year to allow the government to continue functioning.

TRYING TO CUT UNEMPLOYMENT

The defense bill also will contain an extension of jobless benefits, health insurance subsidies for the unemployed and child-care subsidies, Durbin said.

Hoyer said the jobless benefits will be extended by 6 months at a cost of roughly $50 billion.

Democrats hope to attach legislation that would bring down the 10 percent unemployment rate by funding for highway construction and bailing out cash-strapped state governments, which otherwise would have to lay off teachers, police and other public employees.

But it is still not clear whether those items will be included in the defense bill, Durbin said.

Hoyer has said he expects jobs and fiscal discipline to be the two key issues in November's congressional election.

To emphasize fiscal discipline, the House will also include a measure that requires Congress to pay for new spending or tax cuts, Hoyer said. Such "paygo" legislation has repeatedly passed the House this year but the Senate has ignored it.

Centrist Democrats in the Senate say they will not vote to raise the debt limit unless it includes language that would create a commission to bring down budget deficits. That approach is not popular with key House Democrats.

While the House and Senate do not see eye to eye on fiscal discipline measures, leaders from both chambers agree on the need to extend safety net provisions.

More than 1 million jobless Americans could exhaust their unemployment benefits if Congress does not extend them before the end of the year.

Such payments, which average roughly $300 per week, pump money into the economy and ensure the jobless do not default on their mortgages and other bills, lawmakers say.

Lawmakers will not look for a way to pay for the safety net measures because they are considered emergency spending, Hoyer said.

Other job-creating elements could be funded through the $700 billion Troubled Asset Relief Program that was designed to bail out banks and other struggling financial companies.

(Editing by John O'Callaghan)