Unemployment benefits extension nixed for nearly 1 million

Nearly a million people have lost their unemployment benefits because the Senate failed for the third time Thursday to extend the deadline to file for this safety net.

Hoping to overcome deficit concerns, the Senate trimmed down the bill yet again on Wednesday night so that it would only increase the deficit by $33.3 billion over 10 years, instead of $55.1 billion. The main changes were to scale back additional Medicaid funding for the states and to reallocate some stimulus and Defense Department spending.

The bill will now be pulled, according to two Democratic leadership aides. This leaves many groups in flux, including the jobless who have lost their safety net, companies who are waiting to learn what tax breaks are extended, and governors who were counting on the additional funds to balance their budgets.

The grab-bag legislation pushes back the deadline to file for federal unemployment benefits until the end of November, renews expired tax provisions, lengthens a small business lending program and adds to infrastructure investments.

The bill would also push back the deadline to close on home purchases until Sept. 30 and still qualify for a federal tax credit of up to $8,000. It would also raise taxes on investment managers and a tax on oil that finances the Oil Spill Liability Trust Fund.

More than a million people are expected to run out of benefits this month, according to the National Employment Law Project.

The only piece of the bill that may become law is a measure that prevents a 21% cut in Medicare physician reimbursements for six months. The Senate passed this piece of the bill last Friday and the House was expected to vote on it on Thursday evening.

Job Category: Job Market News

Source: CNN (Money)