Dems poised to extend jobless benefits

WASHINGTON — Senate Democrats said Thursday they have reached a deal to extend unemployment-insurance benefits to the nearly 2 million jobless workers across the country who are in danger of running out of assistance by the end of the year.

The agreement would give an additional 14 weeks of benefits to jobless workers in all 50 states. Workers in states with an unemployment rate at 8.5 percent or higher would receive six weeks on top of that. Washington, with an August jobless rate of 9.2 percent, would be included.

Senate Majority Leader Harry Reid, D-Nev., tried to bring the measure to a quick vote on the Senate floor Thursday, but Republicans objected, saying they needed more time to study the proposal and its costs, and possibly offer amendments but the Senate may vote as soon as next week on the measure.

Through the end of August, about 2,700 Washington state residents had exhausted their unemployment benefits, said Sheryl Hutchison, a spokeswoman for the state Employment Security Department (ESD). An estimated 6,000 more ran out of benefits last month, Hutchison said. Absent an extension, 19,000 residents will lose their benefits, the ESD estimates.

About 200,000 people receive unemployment benefits each week, Hutchison said. The top weekly benefit payment is $630, which includes a $25 temporary federal increase and a $45 temporary state increase; both temporary increases expire at the end of the year.

Should Congress pass an extension, Hutchison said, ESD will notify people whose benefits have run out that they can reapply, so long as they are still eligible.

The House last month approved legislation, offered by Rep. Jim McDermott, D-Wash., that gives 13 weeks of extended benefits, but only in those 27 states, the District of Columbia and Puerto Rico, where unemployment rates are at least 8.5 percent.

That formula drew opposition from senators, led by Sen. Jeanne Shaheen, D-N.H., from states where the jobless rate doesn't reach the 8.5 percent threshold. They argued that it was unfair to provide added assistance to workers in one state and not in another.

Supporters of extended benefits point to the lingering stagnation of the job market despite signs of economic recovery. The national unemployment rate is 9.8 percent and is expected to top 10 percent before employers start hiring again.

"As of last month, 15 million unemployed Americans were competing for 3 million available jobs," said Senate Finance Committee Chairman Max Baucus, D-Mont., who brokered the deal with Reid, Sen. Jack Reed, D-R.I., and Shaheen.

"Unemployed workers use these benefits to buy essentials and pay the bills," Shaheen said. "Extending unemployment benefits is one of the most effective actions we can take to stimulate the economy."

States offer 26 weeks of benefits, with the average payment about $300 a week. With federal help, including several measures in the economic-stimulus package passed last February, the unemployed in states hardest hit by the recession can receive up to 79 weeks of assistance.

The proposal also contains a provision allowing families receiving food stamps to remain eligible while receiving an additional $25 a week in unemployment-insurance benefits approved in the stimulus act.

The negotiators said the additional benefits would be paid for by extending through June 2011 the federal unemployment tax, which costs employers about $14 an employee per year

The number of newly laid-off Americans filing first-time claims for jobless benefits, meanwhile, fell to the lowest level since early January, as layoffs eased a bit amid a fledgling economic recovery. The number of initial claims filed for state unemployment benefits fell by 33,000 to a seasonally adjusted 521,000 in the week ended Oct. 3, the Labor Department reported Thursday.

Seattle Times business reporter Drew DeSilver contributed to this report. Material from MarketWatch and Bloomberg News is included in this report.