Unemployment benefit extension fails in the House

There is growing support among Democrats to push for a yearlong extension, especially considering that the unemployment rate is expected to remain elevated through 2011. 

"This vote was a stark test of our priorities, and House Republicans showed that their priorities are decidedly in the wrong place for middle-class families," House Majority Leader Steny Hoyer (D-Md.) said in a statement. 

McDermott said his plan was to introduce a one-year extension, which is backed by the White House, but was asked by his leadership to draw up the three-month bill. 

"I put out one-year extensions a couple of times starting last year to get us way past the election," McDermott said. "I never succeeded because the Senate Republicans would never go more than one, or two or three months. So this time I said, well, no sense in playing around with it, let's do three months and let them say no to that." 

The Senate isn't likely to take up a stand-alone measure on the benefits and will probably wrap them into a larger tax-extenders package that would include the Bush-era tax cuts. 

With lawmakers still working out whether to extend all or a part of the 2001 and 2003 tax cuts, McDermott said he'll make a case when Congress returns that Republicans are willing to spend $700 billion on tax cuts for those in the highest tax brackets versus about an estimated $65 billion for the unemployed. 

The benefits, historically, have been extended without being paid for when the unemployment rate is high. 

Republicans have voiced concern over the measure not being offset and adding to the deficit. Several have suggested tapping into the last batch of unused stimulus funds, about $13 billion. The measure was held up in by Senate Republicans for nearly two months during summer over deficit concerns, as millions lost their benefits over deficit 

McDermott argued the benefits don't add to the long-term structural debt and are the best way to stimulate the economy as it continues to recover from the recession. 

Jobless benefits have pumped nearly $7 billion into the economy every month this year, said Christine Owens, executive director of NELP. 

A new report released Thursday by the Joint Economic Committee found that prematurely ending the federal unemployment insurance benefits program would drain the economy of "$80 billion in purchasing power and result in the loss of over one million jobs over the next year."

For all their talk, McDermott said Republicans don't really want to help the economy because it would aid Democrats in 2012. 

"They've got to keep the economy screwed up until they get past the election," he said.