Senate OKs extending unemployment

WASHINGTON — Senate Democrats said Thursday that 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 above would receive six weeks on top of that.

The Kansas unemployment rate in August was 7.1 percent, according to the federal Bureau of Labor Statistics.

The Labor Department reported Thursday that the number of newly laid-off workers filing first-time claims for jobless benefits fell to the lowest level since early January, as layoffs ease a bit amid a fledgling economic recovery.

The fourth drop in new claims in five weeks is a sign the labor market is slowly healing. But employers are reluctant to hire new workers and the unemployment rate is expected to keep climbing well into next year.

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

The House last month approved legislation that gives 13 weeks of extended benefits, but only in those 27 states, the District of Columbia and Puerto Rico that have unemployment rates of 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 now 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 per 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 Labor Department said Thursday that new claims for unemployment insurance dropped last week to a seasonally adjusted 521,000, from the previous week's upwardly revised total of 554,000.

That's better than the 540,000 that Wall Street economists expected, according to a survey by Thomson Reuters.

Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies' willingness to hire new workers.

Thursday's total is the second lowest this year. Claims have been slowly declining since the spring, but remain well above the 325,000 that economists say is consistent with a healthy economy.