Senate breaks logjam to restore jobless aid

Ester Dela Cruz, laid off nine months ago from her job as an elderly care worker, searches for employment at a jobs center in San Francisco, California in this February 4, 2010 file photo.

WASHINGTON (Reuters) - Highway money and jobless funds were set to flow again after the Senate ended a standoff on Tuesday that disrupted benefits for hundreds of thousands of unemployed Americans.

The Senate voted 78-19 to end a logjam that had worsened the plight of the jobless and thrown thousands out of work as lawmakers bickered over the cost of programs designed to help millions of Americans weather the worst economic downturn in 70 years.

President Barack Obama was expected to sign the measure quickly into law.

The programs expired on Sunday after Republican Senator Jim Bunning prevented the Senate from renewing them on the grounds they would add to the country's $12.4 trillion debt.

As a result, 400,000 jobless people faced the imminent loss of weekly checks that help them pay the bills while they look for work, as well as subsidies that help them pay for health insurance.

Construction projects across the country shut down after 2,000 federal workers were furloughed, while doctors faced a 21 percent pay cut for patients they see under the Medicare health insurance program for the elderly.

"During these difficult economic times, supporting American workers, their families and our small businesses must be everyone's focus," Obama said in a statement released by the White House. "... I'm grateful to the members of the Senate on both sides of the aisle who worked to end this roadblock to relief for America's working families."

In news conferences and floor statements, Democrats said Bunning and his fellow Republicans had taken their opposition to Democratic initiatives to a new extreme.

"Today we have a clear-cut example to show the American people what's wrong with Washington," said Democratic Senator Patty Murray.

The dispute echoed a 1995 standoff that shut down large chunks of the federal government as Democratic President Bill Clinton and congressional Republicans battled over the budget.

REPUBLICANS ACTED TO END STANDOFF

Mindful of a possible backlash from recession-weary voters, Republicans moved on Tuesday to end the standoff.

The agreement enabled Bunning to propose a tax measure to cover the bill's $10 billion tab, but Democrats used budget rules to prevent it coming up for a vote. Many noted that Bunning had refused an identical offer a week ago, fearing it would fail.

"He was offered this choice last week, he wouldn't take it last week," said Dick Durbin, the Senate's No. 2 Democrat. "As a result, a lot of people have suffered."

Many Republicans said they agreed with Bunning's point about spending but did not necessarily support his methods, and few came to the Senate floor to defend Bunning as he endured hours of Democratic criticism.

"I don't think I've spent this much time on the floor in any one week, period, in my life," Bunning said.

A Hall of Fame baseball pitcher with a prickly reputation, Bunning plans to retire this year after Senate Republican Leader Mitch McConnell, a fellow Kentuckian, discouraged him from running for re-election.

The standoff gave Democrats an opportunity to shift the focus from their own struggles to advance legislation that aims to reduce the 9.7 percent U.S. unemployment rate, which they say is their top priority this year.

With the temporary programs renewed, Democrats moved to a much larger $150 billion measure that would extend jobless benefits through the end of the year, help states pay rising health insurance costs and renew a popular set of tax breaks for businesses and individuals.

But their first jobs bill, a $15 billion package centered on tax breaks for businesses that hire new workers, faced an uncertain fate in the House of Representatives.

Democratic leaders in that chamber face objections from black lawmakers who say it is too paltry and centrists who say it violates budget rules.

(Editing by Peter Cooney and Will Dunham)