Unemployment aid in stimulus spotlight

ByABC News
January 30, 2008, 7:04 AM

WASHINGTON -- After the economy soured in 2001, millions of jobless workers waited and worried until Congress voted to temporarily extend their unemployment benefits.

The cycle is starting again.

The House, by a lopsided 385-35 vote Tuesday, passed a $150 billion economic stimulus package including personal tax rebates, business tax breaks and incentives for mortgage lending.

The bill now goes to the Senate, where Finance Committee Chairman Max Baucus, D-Mont., will try to add a $9 billion program providing an extra 13 weeks of unemployment benefits for workers who have exhausted their initial 26 weeks of aid.

Unemployed workers in states where the jobless rate is 6.5% or higher could qualify for another 13 weeks, for a total of 26 additional weeks of assistance.

The measure would be a boon to Tina Buzzo, 31, of Warren, Mich. Her husband, Thomas, 37, lost his construction job in June, and his unemployment benefits expired this month. The family, including a young son, is living on savings and Tina Buzzo's income as an administrative assistant at an auto firm. The state's unemployment rate is 7.6%.

"He's applied at different small companies for anything. He's got his résumé out. We've talked to family members," says Tina Buzzo, who worries the family could lose their home if things don't turn around. "He's even applied for midnight jobs, and there's just nothing out there."

Spending quickly

The Senate effort to broaden the House-passed legislation is partly about efficiency, with the non-partisan Congressional Budget Office citing studies showing expanded jobless benefits are spent more quickly than other forms of economic stimulus.

It's also about growing need, given that 17.5% of the unemployed had been out of work 27 weeks or more as of December, according to the Labor Department. That's well above the 11% rate of long-term joblessness in the spring of 2001, when the nation last fell into recession. More than a million workers will run through their benefits between now and June.