Senate Kills Stimulus Plans, Extends Jobless Aid

The Senate on Wednesday officially shelved legislation to stimulate the economy, but quickly resurrected and approved one provision that enjoyed broad support: a 13-week extension of aid to unemployed people who have run out of benefits since Sept. 11.

The House is under heavy pressure to follow suit on the aid extension, which President Bush also supports as a way to help the rapidly growing ranks of the unemployed who have exhausted their 26 weeks of benefits.

The Senate bill would provide the extended relief to about 5.6 million people this year and into 2003, according to congressional estimates. It is in keeping with the kind of aid Congress traditionally provides to help laid-off workers cope with recessions.

But it is a far more limited economic recovery measure than Congress once had been expected to approve after the Sept. 11 terrorist attacks, which hurt an already struggling economy.

Republicans and Democrats had included the additional unemployment aid in their economic stimulus plans. But both of those bills died Wednesday because of a stalemate in the Senate over other provisions--GOP proposals to cut taxes and Democratic proposals to provide even more generous benefits for the unemployed.

The bills were shunted aside after the Senate held a pair of showdown votes, and neither the Democratic nor the Republican alternatives garnered the 60 votes needed to close debate. The bill to expand unemployment benefits then passed on a voice vote.

The unemployment measure now goes to the House, where Republicans have long said that any increase in unemployment aid should be paired with tax breaks designed to spur job creation.

Some House Republicans are suggesting that the party attempt to add tax cuts or other provisions to the unemployment bill, which could slow its progress. Others want to simply go along with the popular bill rather than give Democrats the opportunity to say Bush and the GOP are unconcerned about the plight of the unemployed.

“The politics are pretty simple: You just do it,” a top House leadership aide said.

In Wednesday’s Senate showdown on the broader economic stimulus legislation, the move to close debate on the Democratic version was supported by 56 senators--four short of the required 60. Voting against the motion were 39 senators.

The bill called for payments to people who did not receive rebates in the tax cut bill passed last year, tax breaks to encourage business investment, aid to states for expanding Medicaid and the expanded unemployment benefits.

The move to close debate on the Republican version, which included more in tax cuts and less in unemployment benefits, failed, 48 to 47.

The Senate then moved on to other legislation, including quick passage of the unemployment measure. Members of both parties insisted that they remained open to future talks on stimulus legislation, but that the effort is considered essentially dead for the year, in part because of signs that the economy is recovering.

Bush had been urging Congress to enact a package of tax cuts and unemployment aid for months. He continued Wednesday to insist on the need for a broader bill and sought to blame Senate Democratic leaders for the deadlock on the issue. But the president seemed to leave open the door to signing a bill limited to unemployment benefits.

“At the minimum, they need to take care of the workers--at the very minimum,” Bush told reporters Wednesday as he toured the New York Police Department’s command center in lower Manhattan. “But it’s important for Congress to realize that our economy has not yet fully recovered. And, therefore, I believe we still need to provide stimulus for economic growth so that there’s jobs.”

Under the Senate bill, the 13 additional weeks would be available to people in all 50 states--not just, as in some past recessions, those in states with especially high unemployment. Congressional analysts say preliminary estimates are that the bill would cost $7.2 billion this year and $3.6 billion in 2003.

Times staff writer Edwin Chen contributed to this report.