Reid asks GOP to join Dems on unemployment insurance

Senate Majority Leader Harry Reid (D-Nev.) begged Republicans to join Democrats in passing legislation to extend unemployment insurance.

“Congress can’t solve every problem, but we can solve this problem,” Reid said on the Senate floor Monday. “A bipartisan group of Senators has been working behind the scenes to reach an agreement to restore emergency unemployment benefits to 1.6 million Americans.”

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The Senate is expected to take another stab at passing a three-month unemployment insurance extension as early as this week.

Democrats tried to pass an unpaid-for three-month extension, which failed because Republicans said they wanted the $6.5 billion cost offset. Democrats then tried to pass an 11-month extension that was fully paid for by extending sequestration for an additional year, which would generate roughly $25 billion. Republicans balked at that plan as well and demanded an open amendment process.

“Since Republicans filibustered a bill to restore benefits without adding a penny to the deficit, the toll on local and national economies has been devastating,” Reid said. “When unemployment benefits dry up, customers disappear from local stores and business suffers.”

Nearly 1.3 million people lost their long-term unemployment benefits at the end of December. Unemployment insurance was designed to help those looking for work in states that can’t afford to pay unemployment benefits for more than six months. Reid said more than 200,000 more people have lost their unemployment benefits since Republicans blocked the previous attempt to extend the benefits.

Sen. Jack Reed (D-R.I.) has been negotiating with GOP Sens. Dean Heller (Nev.) and Rob Portman (Ohio) to find a deal. Reed’s latest proposal is for a three-month extension that is paid for through “pension smoothing” — a pay-for used in the 2012 highway bill. 

Pension smoothing reduces pension expenditures for companies in the short term creating more taxable income, but it’s unclear how long it would take for this accounting procedure to generate the $6.5 billion. Some Republicans have also described the practice as a budget “gimmick” that risks greater liability in the long run.