Politics of Jobless Claims: Is Two Years of Benefits Too Much?

Here's something Capitol Hill lawmakers in both parties generally agree on: With the jobless rate near 10 percent and the economy only sputtering toward recovery, unemployment benefits should be extended beyond the 99 weeks -- or nearly two years -- that state and federal benefits currently last in the hardest-hit states.

But out on the campaign trail, it's a different story -- some insurgent Republican candidates with libertarian streaks are arguing to scale back -- not extend -- the benefits.

In Nevada, where the unemployment rate is a staggering 14 percent, Senate candidate Sharron Angle told journalist Jon Ralston in a local TV interview Tuesday that unemployment benefits discouraged people from looking for work.

VIDEO: Unemployment benefits are drying up for Americans out of work for record periods
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"The truth about it is that they keep extending these unemployment benefits to the point where people are afraid to go out and get a job because the job doesn't pay as much as the unemployment benefit does," she said, even though most people on unemployment receive less than 40 percent of their previous wages. (The maximum benefit in Nevada is $362 a week, far lower than the median household income there, which is more than $56,000.)

In Kentucky, where the unemployment rate is 10.2 percent, Republican Senate candidate Rand Paul told a radio interviewer that the unemployed were essentially getting "handouts."

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"As bad as it sounds, ultimately, we do have to sometimes accept a wage that's less than we had at our previous job in order to get back to work and allow the economy to get started again," Paul said. "Nobody likes that, but it may be one of the tough love things that has to happen."

Lawmakers Mull Over Ways to Stretch Unemployment Benefits

In the halls of Congress, though, the sticking point remains not whether to extend but how to extend unemployment benefits.

A partisan morass has stymied action. Democrats, for the most part, argue that during an economic emergency, unemployment benefits should be extended without making other budget cuts. Republicans, believing the $33 billion six-month extension would add to the national debt, want to offset the cost of extended benefits.

Video of President Barack Obama touting jobs report.
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An estimated 1.2 million workers -- who have all been out of work for more than six months -- started to exhaust their benefits in early June. Their numbers could snowball in July as more long-term unemployed exhaust benefits, according to the National Employment Law Project.

"Both sides have offered ways to address the programs in this bill that we agree should be extended," said Senate Minority Leader Mitch McConnell on the Senate floor Tuesday. "The only difference is that Democrats are demanding that we add the cost to an already unsustainable $13 trillion national debt."

Democrats, for their part, have accused Republicans of abandoning the unemployed at a time of great need. And they say Republicans, by insisting that the more than $30 billion cost of extending unemployment benefits be taken from other programs, are essentially opposing them.

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Business Report (06.28.10)

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