House fails to pass unemployment aid extension

WASHINGTON (Reuters) - Republicans in the House of Representatives on Tuesday blocked a Democratic effort to extend unemployment benefits for the long-term unemployed.

House Ways and Means Committee Chairman Rep. Sander Levin (D-MI) speaks during the Reuters Financial Regulation Summit in Washington April 26, 2010. REUTERS/Jim Young

Democrats brought up the measure under special rules that require a two-thirds majority for passage. But they failed to win sufficient support from Republicans, who expressed concern about the measure’s $33 billion cost to the federal treasury.

The bill would help as many as 1.7 million people whose unemployment insurance benefits have run out. It would extend an emergency unemployment compensation program through November 30.

Democrats said the spending was justified to help the unemployed pay their bills and to boost the economy.

“When you provide unemployment insurance to people, they spend it,” House Ways and Means Committee Chairman Sander Levin said. “If Republicans are worried about growth and consumer demand, they should work to put money in the pockets of people who are desperate, who are out of work, who are looking for work.”

The U.S. unemployment rate, currently 9.7 percent, has remained stubbornly high even as the economy has begun to recover from deep recession sparked by the financial crisis.

The government is due on Friday to report the jobless rate for June. Analysts are expecting a slight increase due to temporary U.S. government census workers being laid off.

But Republicans said the $33 billion price tag was too much to add to an already bloated federal deficit.

“Look around the world. Countries are sinking in debt,” said Representative Dave Camp, the top Republican on the Ways and Means Committee, adding that “this reckless spending cannot go on forever.”

The $1.4 trillion deficit and $13 trillion debt are becoming issues in the run-up to the November U.S. congressional elections in which Republicans hope to make substantial gains against the Democrats, who control Congress.

The extension of jobless aid for the long-term unemployed has run into solid Republican opposition in the Senate as well. A measure was attached to a bill that would extend popular business tax breaks, which stalled last week over Republican concerns about deficit spending.

Reporting by Donna Smith; Editing by Will Dunham