Domestic Taxes

1.2 million to lose benefits in days if stalemate continues

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. 

{mosads}In addition, neither the House nor the Senate bill have
approved an extension of the COBRA subsidy that requires unemployed workers to
pay only 35 percent of a premium to maintain health insurance. That subsidy was
originally included in last year’s stimulus bill.

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

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

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.”

Tags Bob Corker

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