* Time running out for action before benefits expire
* Two million Americans could lose benefits by end of year
* Republicans insist on cuts to offset cost of extension (Recasts, adds details)
By Andy Sullivan
WASHINGTON, Nov 18 Millions of jobless Americans could see unemployment benefits run out in coming weeks after an effort to extend them failed in the House of Representatives on Thursday.
House Democratic leaders said they would take up the measure again but Congress has little time before the benefits expire on Nov. 30. Lawmakers are expected to leave Washington next week for the Thanksgiving holiday and the Senate has not scheduled a vote.
The jobless rate has been stuck around 9.6 percent as the United States struggles to emerge from the financial crisis and its worst recession since the 1930s. Economists expect unemployment to remain high for years to come.
Congress has let jobless benefits lapse twice already this year as Republicans insist the cost -- $160 billion in the last fiscal year -- be offset by cuts elsewhere to prevent the nation's $14 trillion debt from growing further.
"We all want to help those in need. But the American people know that someone has to pay when the government spends money and it shouldn't be our children and grandchildren," said Republican Representative Charles Boustany.
But Democrats say Republicans showed no similar concerns when approving spending for two wars and when pushing to extend tax cuts for the wealthiest Americans, which would add an estimated $700 billion to the deficit over 10 years.
If the measure is not renewed, some 2 million people by the end of the year will stop getting weekly checks they receive as they look for work, says the National Employment Law Project, which advocates for workers' rights.
ANOTHER VOTE IN LATE NOVEMBER?
By a vote of 258 to 154, the proposal to extend benefits through February fell short of the two-thirds margin needed to pass the House under special rules allowing an expedited vote.
Some 21 Republicans joined 237 Democrats to vote for the measure, while 11 Democrats and 143 Republicans voted against.
Under normal rules, the measure needs only a simple majority to pass. Democratic leaders in the House said they would schedule another vote for the week of Nov. 29.
Jobless benefits usually expire after six months but, since the recession took hold in 2007, Congress has voted to extend them for up to 99 weeks.
Nearly half of the 15 million unemployed people in the United States have been out of work for more than six months, the highest level of long-term unemployment since the government began keeping track in the 1940s.
A report in April by the San Francisco Federal Reserve concluded that the long-term benefits boosted the unemployment rate by 0.4 percentage points as some of the jobless were less likely to look for work.
But economists generally think unemployment benefits get a good bang for the buck because people who are out of work and struggling are likely to spend the money quickly, putting it into the economy and stimulating growth. (Additional reporting by Patricia Zengerle; Editing by John O'Callaghan)