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Congress Approves Jobless Benefits Extension

WASHINGTON -(Dow Jones)- Congress approved an extension on Thursday of federal jobless benefits for up to another 20 weeks, sending the bill to the White House for President Barack Obama's signature.

The House voted 403-12 to pass the bill after the Senate unanimously approved the measure Wednesday night.

The legislation also continues a home buyers' tax credit and a measure allowing businesses to write off some of their losses incurred over the last two years.

The centerpiece of the legislation is a move to continue federal jobless benefits for 14 weeks for unemployed Americans in all 50 states, and for 20 weeks in states with jobless rates higher than a three-month average of 8.5%.

The national unemployment rate reached a 26-year high of 9.8% in September, and economists expect it to climb further when the Labor Department reports October figures Friday.

House lawmakers voted to approve the measure more than a month after initially agreeing to a more modest extension of unemployment benefits. The home buyers' tax credit and business tax measure were added in the Senate.

The additional jobless benefits will be paid for by an extension of a payroll tax on employers that was set to expire at the end of the year.

In the Senate, the matter was held up for more than a month over a series of disputes about how to proceed on the legislation.

Both Democrats and Republicans attempted to portray the other side as being more concerned with Senate procedure and ignoring the harsh economic realities people are facing around the country.

The extension of benefits means people living in the worst-affected parts of the country can receive 53 weeks of federal assistance. States vary in how many weeks they provide past that.

But the extension only applies to those long-term unemployed who exhaust their federal benefits before the end of the year. People who lose their jobs next year will receive federal benefits for between 26 and 33 weeks depending on where in the country they live.

If the persistently high unemployment figures continue, lawmakers could return to the issue to offer further federal assistance.

The bill also continues an $8,000 first-time home buyers' tax credit on all house contracts entered into before April 30 and closed by June 30. It creates a new $6,500 credit for existing property owners looking to sell their home and buy another during the same period of time.

Both credits have income restrictions limiting their availability.

Businesses will be able to write off the losses they booked in 2008 or expect to do so in 2009 against federal income taxes paid on profits earned in the previous five years. The economic stimulus plan enacted in February had created the tax credit, but restricted it to smaller firms.

It will also allow smaller investors who lost money in the Bernard Madoff scandal to claim a portion of their losses against taxes paid in earlier years.

-By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com

  (END) Dow Jones Newswires
  11-05-091450ET
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