Unemployment Just Got Worse: Millions to Lose Benefits as Jobless Aid Bill Fails

Millions of Americans are set to lose unemployment benefits after a jobless-aid bill was defeated in the Senate on Thursday.
Millions of Americans are set to lose unemployment benefits after a jobless-aid bill was defeated in the Senate on Thursday.

As the U.S. economy struggles to emerge from the worst recession in decades, millions of Americans are set to lose their unemployment benefits after the Senate failed to extend aid because Democrats couldn't muster the votes to overcome a Republican filibuster.

The defeated bill was designed to extend the unemployment benefits and economic-stimulus measures enacted to soften the impact of the recession. As a result, states will lose critical federal reimbursement for Medicare costs. And 1.2 million Americans will lose unemployment benefits at the end of the week, and as many as 2 million will lose them by mid-July.

The news will be a blow to the millions who have lost their jobs in the recession. The national unemployment rate currently stands at 9.7%, more than double what's considered healthy.

Weeks of Debate For Naught

After eight weeks of debate, all 40 Senate Republicans were joined by Sen. Ben Nelson, a Nebraska Democrat, to filibuster the bill. These senators opposed the bill, they said, because they didn't want to add to the ballooning federal debt, which is expected to reach $14 trillion this year.

In response to the GOP criticism, Senate Democrats cut the bill's cost and said that revenue increases and spending offsets would pay for more than two-thirds of the $100 billion-plus bill. They cut $24 billion in state Medicare reimbursements to $16 billion, for example. The bill would have extended several stimulative business tax breaks through new taxes on hedge-fund managers, multinational corporations and oil companies.

But that left the $35 billion, six-month extension for jobless aid unpaid. Republicans balked. And although President Obama supported the bill, which is designed to further the economic recovery, the White House didn't spend much political capital on its passage.

The bill's collapse illustrates the potency of the Senate filibuster during an election year in which the minority is loathe to hand the majority a political victory. Senate rules require 60 votes to end debate and proceed to a majority vote. Democrats have 59 votes, which amounts to a solid majority to pass legislation, but Republicans never allowed the bill to reach an up-or-down vote they were sure to lose.

Politics or Principle?

Sen. Harry Reid of Nevada, the Democratic leader, says Wednesday's vote -- the majority's third try -- will be the last attempt. He blamed Republicans for the bill's failure. "We're where we are because Republicans have said 'no' to helping America," Reid said at a news conference Thursday.

Michigan Democrat Debbie Stabenow accused the GOP of trying to undermine the economic recovery -- and indeed make the recession worse -- in order to make Democrats look bad come election day.

"If [Republicans] can stop the recovery from occurring, if they can create as much pain as possible, people will be angry and will not vote at all or will vote against those in the majority," she said on a conference call. "This is a very cynical political strategy."

Minority Leader Mitch McConnell, a Kentucky Republican, countered: "Democrats will not pass a bill that doesn't add to the debt. That's the principle we're really fighting for in this debate."