Reid: U.S. Senate to take up jobless benefits extension bill next week

WASHINGTON — The Senate will take another stab next week at extending jobless benefits for the long-term unemployed, Sen. Harry Reid said Wednesday.

Reid, the Senate majority leader from Nevada, said Democrats will offer a three-month extension of payments that expired late in December, affecting more than 1.6 million Americans. The roughly $6.5 billion cost would be paid for through a change in pension accounting, according to Democratic aides.

“The Republicans said they wanted it paid for and we figured out a way to pay for it,” Reid said. He said 58 or 59 senators support the legislation, still short of the 60 needed to advance it procedurally.

With 55 Democrats and independents expected to vote for the plan, “we hope we can get five courageous Republicans to step over the line,” Reid said. “We are very close right now.”

Reid also said he is planning for the Senate to vote early in March on legislation to raise the federal minimum wage gradually to $10.10 an hour, a rate President Barack Obama said in his State of the Union speech he would put in place immediately for federal contract workers.

The federal minimum wage is $7.25 an hour, although 21 states have minimum wages above the federal rate. Nevada’s minimum is $7.25, and $8.25 for jobs that do not include health benefits, according to the National Conference of State Legislatures.

“Someone who is dignified and works for 40 hours should not have to be at the poverty line, and that’s what they are” with the current minimum, Reid said, adding “10.10 is something that will help. Some feel it should be higher than that but I am satisfied with that.”

Efforts earlier this month to restore expired unemployment benefits collapsed in the Senate, with Democrats and Republicans at odds over whether and how the cost should be offset through new revenues or cuts elsewhere in the budget. Benefits have expired for more than 21,000 Nevadans, according to a calculation last week by Democrats.

But negotiations among senators continued through the impasse, with Sen. Dean Heller, R-Nev., among the participants.

Heller did not comment on the proposal unveiled by Reid. His spokeswoman said Heller “is continuing to talk with his Democratic and Republican colleagues about a number of ideas to move unemployment insurance legislation forward.”

“I think it’s doable,” said Sen. Rob Portman, R-Ohio, another negotiator. “The reality is, we’re pretty close.”

At an event Wednesday sponsored by Politico, Portman said he learned of the Democrats’ pension pay-for only on Tuesday night, and “we want to look at it.”

The Democratic plan would extend “pension smoothing” provisions that were enacted as part of a 2012 highway bill that passed the Senate 74-22. The accounting practice in theory reduces pension expenditures and generates savings in the short term, but has been described by the Committee for a Responsible Federal Budget as a “gimmick” that risks greater liability in the long run.

Reid had expressed reservations about a three-month benefit extension as opposed to one that could run for 11 months or longer. For one, he said states would need more time to alter benefits software to accommodate new payment formulas.

Senate aides said the new Democratic proposal avoids that problem because it does not alter the tiered system that calculates benefits based on a state’s unemployment rate. The maximum combined duration for state and federal unemployment benefits would continue at 73 weeks for individuals in states where the unemployment rate is 9 percent or higher.

Nevada’s latest unemployment figures dipped this week to 8.8 percent, ceding its standing as the state with the highest jobless rate to Rhode Island, at 9.1 percent. If Nevada’s rate stays below 9 percent, combined state and federal unemployment benefits would drop to 59 weeks.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760. Follow him on Twitter @STetreaultDC.