March 26, 2010 / 11:47 AM / 9 years ago

Jobless aid could halt after Congress fails to act

WASHINGTON (Reuters) - Hundreds of thousands of jobless Americans could once again face a disruption in their unemployment benefits after Congress failed to extend them on Thursday.

A construction worker takes part in a rally outside the KB Home headquarters in Los Angeles April 1, 2009. REUTERS/Mario Anzuoni

Amid the deepest recession in 70 years, Congress prepared to adjourn for a two-week break without extending jobless programs that are due to expire in coming days.

That could lead to bureaucratic disarray and further hardship for those who depend on the payments to help cover their bills while they look for work.

Up to 750,000 people could lose their benefits by the end of April if Congress does not act, Democratic Senator Jack Reed said.

Democrats had hoped to extend the program for a month, but Republican Senator Tom Coburn argued that the $9.2 billion cost should be covered by redirecting money from last year’s economic stimulus package rather than adding to the record budget deficit.

“We are now like the person who gets in trouble on their credit card,” said Coburn, who prevented the Senate from voting on either approach.

Democrats said that using stimulus money for unemployment payments would undercut the government’s job-creating efforts elsewhere.

“I think there’s a level of anger and frustration on the Republican side — I wish they wouldn’t take it out on unemployed Americans,” Democratic Senator Dick Durbin told reporters.

The debate echoed a similar standoff at the end of February, when Republican Senator Jim Bunning’s objection resulted in a two-day disruption of payments. But this time, the disruption could be more substantial.

Congress is not scheduled to return until April 12, a week after benefits could expire for those who have been out of work the longest.

Healthcare subsidies for the unemployed and a federal flood-insurance program also would be disrupted. Likewise, doctors would see their payments slashed for patients under the Medicare health-insurance program.

The Senate will seek to impose those programs retroactively when it returns from break, an aide to Senate Majority Leader Harry Reid said.

Democrats and Republicans in the Senate had actually reached a compromise after hours of negotiation, but it was rejected by the Democratic-controlled House of Representatives, which had passed its own version more than a week earlier.

That prompted a new round of finger-pointing.

“Unfortunately, the bipartisan agreement that was reached in the Senate was rejected by House Democrats,” said Don Stewart, a spokesman for Senate Republican Leader Mitch McConnell.

House Democrats said the Republicans were grandstanding at the expense of struggling Americans.

“Just like Senator Bunning before him, Senator Coburn has decided to stand in the way of Americans receiving needed benefits,” said Nadeam Elshami, a spokesman for House Speaker Nancy Pelosi.

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