Dems scale back bill to woo votes for jobless aid

[May 27, 2010]  WASHINGTON (AP) -- Democrats are struggling to extend unemployment benefits before they go on vacation next week as they work to ease concerns among jittery lawmakers being hammered over deficit spending.

House leaders hope to vote Thursday on a bill that would extend the benefits through November, but they are running into opposition from Republicans and some Democrats concerned about the cost of the overall bill.

The benefits are part of a sweeping package of unfinished business that lawmakers hope to complete before their Memorial Day recess.

Democratic leaders cut the cost of the legislation Wednesday by more than $50 billion -- to about $140 billion -- in an attempt to pick up votes. The bill would add about $84 billion to the federal budget deficit.

It's a tough vote for lawmakers who want to help constituents hit hard by the recession but are wary of being labeled big spenders. The economy is starting to pick up, but unemployment is still high as the nation continues to struggle from the loss of more than 8 million jobs. At the same time, angst over deficit spending is growing as midterm congressional elections near in November.

If Congress doesn't act, thousands of people would begin to lose jobless benefits when an extension of unemployment insurance expires next week. A 65 percent subsidy for health insurance benefits for the unemployed under the COBRA program also expires.

Time is running short for the House to vote because the bill still has to go to the Senate, which can take days to act. Senate leaders have said they are confidant they will have the votes to pass the bill. But some House members are wary of voting for an expensive package, only to have it languish on the other side of the Capitol.

"Unemployment's too high, too many people can't find jobs and obviously we have to act," said House Majority Leader Steny Hoyer, D-Md. "But there is still great concern about spending levels."

The expanded jobless benefits provide up to 99 weeks of payments in many states, at a cost of nearly $40 billion. The benefits are part of a bill that includes a one-year extension of about 50 popular tax breaks that expired at the end of last year and a delay in scheduled cuts in Medicare payments to doctors.

Subsidies to help laid-off workers pay for health insurance would continue through November, at a cost of $7 billion. States would get $24 billion to help cover Medicaid costs.

The cost of the bill would be partially offset by tax increases on investment fund managers, oil companies and some international businesses. The tax increases total about $57 billion over the next decade.

The original package unveiled last week would have extended unemployment benefits through December and delayed a 21 percent cut in Medicare payments until 2014. The pared-down bill would delay the Medicare cuts until 2012, when lawmakers would have to address the issue again.

The changes were meant to woo support from moderate Democrats concerned about the growing national debt, but several members of the conservative Blue Dog caucus were noncommittal.

"It's the total cost," said Rep. Henry Cuellar, D-Texas. "We are hearing from the public, 'You're adding to the deficit, you're adding to the deficit.'"

Another Blue Dog, Rep. John Tanner, D-Tenn., said, "I'm not crazy about it."

[Associated Press; By STEPHEN OHLEMACHER]

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