Senate passes jobless aid, business tax breaks

The Senate voted Wednesday to extend a host of soon-to-expire elements of last year’s economic stimulus measure, including help for the jobless and money to help financially strapped states pay for health care for the poor.

The 62-36 vote came over protests from conservatives who say the bill adds too much to the $12.5 trillion national debt. Six Republicans joined all but one Democrat, Ben Nelson of Nebraska, in voting for the bill.

The plight of the jobless and the political power of an annual package of tax breaks powered the measure through the Senate, even though it would add more than $130 billion to the budget deficit over the next year and a half.

The measure is the second piece of the Democrats’ much-touted jobs agenda to pass the Senate this year, with more elements promised, such as help for small businesses suffering from a credit crunch. Concern over out-of-control budget deficits are a big challenge to the success of the agenda.

The vote sends the measure into talks with the House, which is wary about some Senate provisions included to defray the measure’s impact on the deficit since they may want to use such offsets to help finance an overhaul of the health care system.

Democrats also hope to finish work this week on a far smaller job-creation measure blending additional highway spending with new tax breaks for companies that hire the unemployed.

The bill would provide unemployment benefits of up to 99 weeks in many states for people mired in joblessness as the economy slowly recovers from the worst recession in decades.

The measure illustrates the great extent to which direct help for the jobless and the poor makes up a large portion of Democrats’ election-year agenda on jobs — and threatens to squeeze out other items amid concerns about a budget deficit.

The sweeping bill cleans up a host of unfinished congressional business from last year that languished as the Senate focused on health care. It would also prevent doctors from absorbing a 21 percent cut in Medicare payments and extends through December a generous 65 percent subsidy of health insurance premiums for the unemployed under the COBRA program, at a cost of $10 billion.

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

The $66 billion cost of providing additional months of unemployment checks — the core benefit is 26 weeks — is added directly to a budget deficit expected to hit $1.6 trillion this year. Federal cash to help states with Medicaid adds about $25 billion more.

But Democrats said it would be heartless to cut off unemployment benefits to the long-term jobless and contended that the benefits inject demand into the economy, helping to lift it.

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.