Democrats pleased with jobless benefits extension but mulling over tax-cut package

The statement continues: "The Republican demands would provide tax cuts to the millionaires and billionaires, fail to create jobs and increase the deficit. And to add insult to injury, the Republican estate tax proposal would help only 39,000 of America’s richest families, while adding about $25 billion more to the deficit."

The 13-month extension will continue to provide those federal benefits up to but not exceeding 99 weeks to those in states with the highest levels of unemployment who have exhausted their 26 weeks of state unemployment insurance. 

States offer different tiers of federal jobless benefits based on their individual unemployment levels. 

The latest extension expired Nov. 30, putting about 2 million people in jeopardy of losing benefits by the end of the month. If Congress can agree on a tax-cut plan, benefits will be reinstated. 

Sen. Claire McCaskill (D-Mo.) said she was "pleased that we're giving the extension of unemployment" while acknowledging that  "there's a lot of things in here that I think many of us do not like."

"I mean, this is a compromise," she said. "I'm also impressed that the president got many parts of the stimulus extended in this deal. The parts of the stimulus that give tax breaks, that were focused on the middle class and working people."

The administration and House and Senate Democrats had just recently begun pursuing a $56.4 billion extension of the jobless benefits to run through the end of next year. Passing a one-year bill appeared an impossibility, with most Republicans calling for the measure to be offset with other revenue or unused federal funds. 

The jobless benefits' extension inclusion in the overall tax package certainly sweetens the deal for Democrats who are being asked to consider and accept the extension of all the 2001 and 2003 tax cuts. 

"The long-term unemployed and the economy both deserve something this robust," said Judy Conti, with the National Employment Law Project. "We also are hopeful that, because we won’t have to fight to keep this program up and running every two months next year, that members of Congress will turn their attention to other ways to create jobs, especially for those who have run out of even the generous benefits that these programs provide."

Rep. Michele Bachmann (R-Minn.), the chairwoman of the House Tea Party Caucus, said Republicans could balk at voting to extend all the tax cuts for two years if it's tied to a long-term extension of jobless benefits.

Bachmann on Tuesday was still pushing for the spending for unemployment benefits to be paid for in what could amount to at least a $700 billion tax-cut package. 

"Our economy doesn’t have a moment to waste and it’s vital that we stop these tax increases now, but we cannot overlook the consequences of another unfunded extension of unemployment benefits," she said in a statement. 

The Obama administration, congressional Democrats and some economists argue that paying for the benefits negates their economic stimulus effects, while Republicans have said the extension adds to the deficit. 

Historically, extensions of unemployment benefits have been considered emergency spending and haven't been paid for during times of high unemployment. The national unemployment rate is 9.8 percent, and the lowest rate at which benefits were cut off is 7.2 percent.