* Hundreds of thousands may face disruption in benefits
* Standoff in Senate over how to pay for them
* Congress leaves for recess without reaching agreement
By Andy Sullivan
WASHINGTON, March 26 (Reuters) - Hundreds of thousands of jobless Americans could face further financial strain in coming weeks after Congress failed to extend the unemployment benefits that help them pay the bills while they look for work.
With 14.9 million Americans out of work, Congress adjourned for a two-week break without extending jobless programs that are due to expire in coming days.
Republican Senator Tom Coburn blocked the Senate from voting to extend the program on the grounds its $9.2 billion cost should not add to the deficit. Democrats say it qualifies as emergency spending and thus does not need to be offset with tax increases or spending cuts elsewhere.
The two sides agreed on Thursday to a short-term extension that would have been paid for elsewhere in the budget, but that compromise was rejected by the Democratic-controlled House of Representatives.
The unemployment rate stands at 9.7 percent and is expected to remain stubbornly high for months to come even as the economy recovers from the worst recession in 70 years.
With no solution to the impasse, senators held a final round of finger-pointing before leaving for a spring recess.
Democrats noted Republicans did not seek ways to pay for massive tax cuts and other measures that added to the deficit when they controlled Congress.
“If this isn’t an emergency, I don’t know what is,” said Democratic Senator Debbie Stabenow, whose home state of Michigan has the nation’s highest unemployment rate at 14.1 percent.
Republicans said Democrats are not interested in reining in spending despite record budget deficits.
“Somebody has to start saying ‘no’ to the addiction that we have, that every time we have a problem we just spend money on it,” Coburn said.
Jobless benefits normally expire after six months but Congress has extended the limit several times amid a slump marked by unusually high levels of long-term joblessness. More than 40 percent of the unemployed have been out of work for longer than six months, according to the Labor Department.
The House passed another extension more than a week ago, but the Senate did not take it up until Thursday as the healthcare reform effort dominated the agenda.
A similar standoff at the end of February suspended benefits for several days. This time it could lead to greater disruption.
Congress is scheduled to return on April 12, a week after benefits will start to 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. Doctors who treat patients under the Medicare health-insurance program would see their pay slashed.
The Senate will seek to reinstate these programs retroactively when it returns from break, according to a spokesman for Senate Majority Leader Harry Reid.
But even a one-week disruption in unemployment benefits could be a severe blow when one job is available for every five people looking for work.
“We’re talking about $250 to $300 a week, but it’s the difference between being able to keep your family going and not,” Stabenow said.
Editing by Vicki Allen