By Vicki Needham - 06/27/10 11:11 PM EDT
Millions of people will lose their health insurance and unemployment benefits because of the Senate stalemate over a tax package.
More than 1.2 million Americans will exhaust their unemployment benefits by the end of June if Congress fails to work out a deal on an extension of unemployment benefits, according to the National Employment Law Project, a group studying the issue.
The premium generally costs hundreds of dollars, a price many unemployed people are unlikely to be able to afford without the subsidy.
GOP Sen. Olympia Snowe (Maine) on Friday suggested the unemployment benefits be offered as a stand-alone package, but it is unclear whether Democrats are willing to go along with that deal.
Democrats have argued the unemployment benefits should be considered emergency spending that does not have to be offset with other spending cuts or tax increases. Republicans have balked at the $33 billion cost, which would be added to record deficits.
The latest version of the tax bill package paid for every provision except the unemployment benefits extension, but it still failed to move forward in a 57-41 vote.
More than 2 million workers have benefited from the COBRA healthcare subsidy, according to NELP. It estimates that 144,000 people per month will lose out on the subsidy due to its discontinuation.
The elimination of the subsidy will also hurt those still collecting unemployment.
Without the subsidy, a much greater share of money included in unemployment checks would be spent on health insurance. Many are likely to drop their insurance.
The Senate measure had previously cut an extra $25 per week in unemployment insurance that was included in the stimulus bill.
Snowe has been seen as a possible yes vote, and unemployment is a concern in her state.
The jobless rate in Maine stood at 8 percent in May, third among New England states.
Other Republicans have said pressure is mounting to pass unemployment benefits but it's unknown who might vote for a stand-alone package.
Republican Sen. Bob Corker (Tenn.), whose state is one of 17
with double-digit unemployment at 10.4 percent, said on Friday that he can't
vote for any bill that isn't fully offset.
“My heart goes out to Americans who are hurting because Washington can’t agree on a way to pay for an extension of unemployment benefits,” Corker said in a release. “I voted several times to pass and pay for an extension, but I cannot in good conscience continue voting for bills that aren’t paid for.”
The Snowe solution is unlikely to satisfy Nebraska Democrat Ben Nelson either, the lone member of his party to vote against the bill, who has remained steadfastly against any legislation that adds to the deficit.
Nelson said his state's 4.9 percent unemployment rate has made it easier to wait out his colleagues in hopes that they can solve the deficit-spending issue.
He doesn't oppose the extension of unemployment benefits but he doesn't want the cost adding to the deficit.
"At some point they need to be paid for," he said. "Some people think it's an emergency. I think it's important."