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U.S. Senate Democrats offer new jobless benefit plan

Richard Cowan
Thursday, 9 Jan 2014 | 4:30 PM ET

* Proposal pays cost of renewing benefits to mid-Nov.

* Reforms to unemployment insurance program included

* Republicans have not yet embraced initiative

WASHINGTON, Jan 9 (Reuters) - U.S. Senate negotiators on Thursday mulled a new Democratic proposal to revive federal unemployment benefits until mid-November and pay the $18 billion price tag with new spending cuts, Senate Majority Leader Harry Reid said.

"The package does what the Republicans wanted," Reid said on the Senate floor. He said the cost of renewing the jobless benefits for about 1.4 million long-term unemployed Americans would be "entirely paid for" and would contain "structural changes they (Republicans) were demanding."

Senate Budget Committee Chairwoman Patty Murray, one of the negotiators on the legislation, told reporters that she was upbeat about its prospects. "I feel positive that we can get there in a bipartisan way."

Some Republican senators were still reviewing the legislation. But others complained that Reid had moved to shut off senators from offering additional amendments.

The Congressional Budget Office was still analyzing the proposal to determine whether it achieves the budget goals it sets forth. It was not clear when Reid might put the plan to a vote in the deeply divided and highly partisan Senate.

Federal jobless benefits expired on Dec. 28, leaving more than 1.3 million long-term unemployed people without an average of $300 in weekly payments. Reid said that since then, the number has grown to about 1.4 million.

Reid said that another negotiator, Republican Senator Dean Heller of Nevada, had a medical emergency and was not yet able to study the proposal that was crafted by Democratic Senator Jack Reed of Rhode Island.

Under the new Democratic plan, most of the $18 billion cost would be offset by extending automatic spending cuts, known as "sequestration," meaning that the savings would be achieved years from now, according to a senior Senate Democratic aide.

Other savings would be attained by tightening some requirements for people who collect both jobless benefits and disability payments, Reid said.

Furthermore, Reid said the measure would "reduce slightly" the number of weeks a jobless person could collect payments.

Reid bemoaned that a full-year extension of the payments no longer appeared doable. "This takes care of it for the good part of this year." But under this proposal, those who lost benefits with the start of the new year will not get them retroactively and it is not clear what will happen in mid-November when they would expire, just after the congressional elections.

"We can't find enough money" to pay for more jobless benefits, Reid said.

Democrats had been pushing for a one-year extension of the expired benefits while Republicans have said they would go along with a three-month renewal, but only if the costs were covered.

The Democratic aide, who asked not to be identified, said that the sequestration savings would be applied to "mandatory" programs, such as federal payments to doctors and other healthcare providers participating in the Medicare program.

The across-the-board sequestration savings of $1.2 trillion that began early this year spanned a decade. The additional savings would be tacked onto the end, meaning that they would be achieved in 2024.

Ironically, Congress, in a budget deal enacted last month, began rolling back some of those meat-ax-approach savings that many lawmakers complained were hurting necessary military and domestic programs.

Some lawmakers have called for repealing all of the across-the-board cuts and substituting more targeted savings. But Congress has been unable to agree on a long-term replacement.

If the deal is struck on renewing the jobless aid and the full Senate approves it, the Republican-controlled House of Representatives also would have to sign off.

House Speaker John Boehner has set forth two requirements for any extension of jobless benefits: that the cost be covered and that it be accompanied by legislation to create jobs.

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