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Congress approves 7-week extension of jobless benefits

November 21, 2008|Associated Press

WASHINGTON — Jarred by new alarms on the jobless front, Congress raced to approve legislation Thursday to keep unemployment checks flowing through the December holidays and into the new year for 1 million or more laid-off Americans whose benefits are running out.

The Senate's vote followed Thursday's government report that laid-off workers' new claims for jobless aid had hit a 16-year high and the number of Americans searching for work had surged past 10 million.

The White House, which had opposed broader legislation containing the benefits extension, urged passage of the new version and said President Bush would quickly sign it.

About 1.2 million people would exhaust their unemployment insurance by the end of the year without the extension, sponsors said. The measure is estimated to cost about $5.7 billion, although economists put the positive effect at $1.64 for every dollar spent on jobless benefits because the money helps sustain other jobs and restores consumer confidence.

"Putting money in the hands of unemployed families means they will be able to pay their rent and utility bills, buy groceries and clothe their children," Sen. Dick Durbin (D-Ill.) said after the voice vote in the Senate. "It is money that will create economic growth in America."

The House had approved the bill in October.

More than 1.2 million jobs have been lost this year, and the civilian jobless rate is at a 14-year high of 6.5%.

Thursday's report by the Labor Department said new claims for unemployment benefits jumped last week to 542,000, the highest level since July 1992 and fresh evidence of a rapidly weakening job market that is expected to get even worse next year.

The legislation as approved would provide seven additional weeks of payments to people who have exhausted their benefits or will exhaust them soon. Those in states where the unemployment rate is above 6% would be entitled to an additional 13 weeks above the 26 weeks of regular benefits. Benefit checks average about $300 a week nationwide.

The benefits provided would be in addition to 13 weeks of federally funded extended benefits approved by Congress last June.

Congress has enacted federally funded extensions seven times in the last 50 years, most recently in 2002.

In yet another bad sign for the economy's near future, the private, New York-based Conference Board said Thursday that its monthly forecast of economic activity declined 0.8% in October. Over the last seven months, the index has declined at a 4.7% annual rate, faster than at any other time since 2001.

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