Congress extends jobless benefits, expands tax credit to all homebuyers

Congress on Thursday decisively approved an extension of unemployment benefits for almost two million people out of work nearly a year or more as the U.S. continues to lose jobs.

The White House quickly announced that President Barack Obama on Friday morning would sign the bill that House Speaker Nancy Pelosi characterized as a lifeline "to the men and women hardest hit by the recession," the people who still can't find work even as the economy shows signs of coming back to life.

The measure, cleared the House 403-12 Thursday, a day after it won unanimous support in the Senate. It extends benefits for 14 weeks for all those who have exhausted their federal aid or will do so by the end of the year. Those living in states where the unemployment rate is at 8.5 percent or above get an additional six weeks. The national jobless rate is now 9.8 percent.

The fourth extension passed by Congress in the past 18 months would stretch federal aid to a maximum of 99 weeks, well beyond the extent of government intervention during past economic downturns. During the 1970s, the out-of-work were entitled to up to 65 weeks of assistance.

The latest congressional action comes as the prospects for the out-of-work remains bleak despite signs of economic recovery. New job market figures are coming out Friday, and economists are expecting tens of thousands of new job losses.

The legislation also included several tax credits designed to get the economy back on track: It extends for seven months the $8,000 credit for first-time homebuyers that is set to expire this month and expands that program with a $6,500 credit for purchases by homeowners who have lived in their current residences at least five years.

It also expands a law providing refunds for money-losing businesses that paid taxes on profits during the past five years.

Supporters cite sobering figures in stressing the need for the unemployment legislation: more than a third of the 15 million jobless have been looking for work for six months or more, a record level; 7,000 people are exhausting their benefits every day and there are some six job seekers for every job opening.

The National Employment Law Project says 600,000 lost their unemployment checks, which average about $300 a week, in September and October.

Lawmakers also pointed out that it made good economic sense to help the unemployed. House Majority Leader Steny Hoyer, D-Md., quoted economic estimates that every dollar from an unemployment check generates $1.61 in local economic activity because the unemployed quickly spend money on food and other basics. "We help people in very bad straits and we help our economy and help us all."

While all 12 no votes were Republicans, GOP lawmakers overwhelmingly supported the bill, Several, however, used the debate to criticize the Obama administration's job creation policies. "We are not simply in the jobless recovery. we are in the job loss recovery," said Rep. Kevin Brady, R-Texas.

The lead sponsor of the bill in the House, Rep. Jim McDermott, D-Wash., reminded lawmakers that they'll have to revisit the issue again before adjourning for the year. The bill applies to benefits exhausted this year, and "Congress must act again before the end of this year to continue the extended unemployment benefits that we are now improving."

The cost for benefits extension is $2.4 billion, to be paid for by extending an unemployment insurance payroll tax that employers must pay.