Senate expected to OK bill extending jobless benefits

WASHINGTON — Federal legislation to give additional months of unemployment benefits to people who have been out of a job for more than half a year cleared a key hurdle Tuesday that guarantees it will soon pass the Senate.

The sweeping bill also would prevent doctors from absorbing a crippling cut in Medicare payments and extends health-insurance subsidies for the unemployed through December. It would add $132 billion to the budget deficit over the 1 ½ years.

Eight Republicans voted with Democrats to defeat a GOP filibuster of the measure, setting up a final vote Wednesday.

Democrats also hope this week to separately finish work on a far smaller job-creation measure blending additional highway spending with new tax breaks for companies that hire the unemployed. The Senate could clear the measure for President Obama's signature by Friday.

Tuesday's larger bill also provides the annual extension of $26 billion worth of tax breaks — that are popular with senators in both parties — for businesses and individuals.

The $66 billion cost of providing the extended-unemployment checks is added to a budget deficit expected to hit $1.6 trillion this year.

In states with the highest jobless rates, including Washington, people are eligible to receive benefits for up to 99 weeks. A 65 percent health insurance subsidy for the unemployed under the COBRA program adds about another $10 billion. Federal cash to help states with Medicaid adds about $25 billion more.

The measure closes $29 billion of tax loopholes to help defray its cost, including one enjoyed by paper companies that get a credit from burning "black liquor," a pulp-making byproduct, as if it were an alternative fuel. The bill includes about 60 popular tax breaks for individuals and businesses that expired at the end of 2009. The bill would extend the tax breaks through 2010.

The tax breaks include a property-tax deduction for people who don't itemize, lucrative credits that help businesses finance research and development and a sales-tax deduction that mainly helps people in the nine states without income taxes: Washington, Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee and Wyoming.

There is a deduction for college tuition for couples making less than $160,000 a year, and one for teachers who use their own money to buy school supplies. There is a tax credit for community-development agencies that invest in low-income neighborhoods, as well as a tax break for restaurant owners and retailers who remodel their stores.