House, Bush Near Accord on Jobless : Economy: Tentative $5.1-billion pact would provide extra benefits to long-term unemployed. Revenue would come from proposed changes in tax collection practices.

Ending months of deadlock, House Democrats reached agreement in principle Tuesday with the Bush Administration on a new version of a bill that would extend jobless payments to an estimated 3 million unemployed workers who have exhausted their regular benefits.

Barring a last-minute snag over the cost, the bill appeared headed for a House vote Thursday, followed by Senate action that would forward the measure to President Bush by this weekend.

Rep. Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee, came up with the new approach designed to avoid a veto by Bush and begin the extra payments by the end of the month.

Congressional sources said that the bill would provide $5.1 billion in benefits to Americans who have exhausted the maximum 26 weeks of payments mandated by current law and cannot find work because of prolonged economic problems.

The added benefits would last for six, 13 or 20 weeks, depending on the level of unemployment in the state where the worker resides. California’s long-term jobless would be eligible for another 13 weeks of benefits.

To meet a demand by President Bush that the bill pay for itself, Democrats proposed raising most of the revenue by speeding up individual taxpayers’ estimated payments and maintaining the unemployment tax paid by employers on their workers’ wages at 0.08% instead of permitting it to drop to 0.06%. The Democrats also proposed to extend an Internal Revenue Service practice, now scheduled to expire, under which debts owed the government such as overdue student loans would be deducted from income tax refunds.

House Minority Leader Robert H. Michel (R-Ill.), who discussed the latest plan with Rostenkowski after Democrats on the Ways and Means panel gave it their blessing, said that the plan appears to provide the makings of an agreement but that cost details need to be worked out with the Department of Labor.

“I feel good about where we are,” Michel told reporters. “Certainly it’s in the ballpark with what the President wants.”

White House Budget Director Richard G. Darman, who joined Treasury Secretary Nicholas F. Brady at the session with Michel and Senate Minority Leader Bob Dole (R-Kan.), agreed with Michel’s upbeat appraisal.

“The sides are getting close enough so I think you can say it’s within the settleable range,” Darman said after the meeting. He added that the Administration wants to “run the numbers” on benefit costs and financing of the measure before giving its endorsement, however.

Speaker Thomas S. Foley (D-Wash.) said that he supports the latest version of the bill--the third that will go to the House floor in less than four months--and believes the President will sign it.

Bush refused to declare a budget emergency in August, thereby blocking payment of the extra benefits after signing the first bill passed by Congress. His veto of a second version of the legislation in October was sustained in the Senate by two votes.

Bush objected that the two earlier bills did not raise the revenue needed to offset the cost of additional benefits, thus potentially increasing the budget deficit.

Sources said that the plan to speed up estimated tax payments would affect only those people earning more than $50,000 annually whose income jumps by $30,000 or more. Now those taxpayers are required to make quarterly payments to the government based on their previous year’s income.

Under the new plan, they would be required to make such payments on current or projected income. The proposal contains special exceptions for persons who may not know in advance how much their annual earnings will be when they file the payments.

The Senate, where Majority Leader George J. Mitchell (D-Me.) has proposed a modified freeze in foreign aid to pay for additional jobless benefits over the next five years, is expected to accept the House approach.

Meanwhile, a bipartisan push began to extend a dozen popular tax breaks that are scheduled to expire at the end of the year, including a tax credit for investment in low-income housing and special tax treatment for business research and development expenses.

The package also includes tax deductions for health insurance premiums of self-employed persons, a targeted jobs tax credit for disabled workers, special treatment for state-issued mortgage revenue bonds and tax breaks for employer-provided assistance with tuition and legal expenses.

Sen. John C. Danforth (R-Mo.) said that the tax benefits now scheduled to expire Dec. 31 would help create jobs or preserve jobs. The $4.7-billion cost to the Treasury, he said, could be made up by other measures.

Rostenkowski has said that he favors some of the expiring tax breaks but intends to pass legislation next year that would be retroactive to Jan. 1. Danforth and Democrats who co-sponsor the “extenders,” as they are known in Capitol Hill jargon, said that lack of congressional action this year would impede business planning because of uncertainty over whether the tax breaks would be continued.