Senate Strikes Deal To Extend Unemployment Benefits

Well, lookie here: Out of nowhere, the Senate has struck a deal to extend unemployment benefits. Jobless benefits expired around Christmas last year, but Senate Republicans repeatedly blocked all Democratic attempts to extend them. It looked like the issue was dead, but on Thursday, five Republicans and five Democrats unveiled a measure to extend unemployment benefits for another five months.

The deal, if passes, will allow the two million or so Americans whose unemployment insurance ran out on December 28th to begin receiving benefits again. What’s more, it’ll be retroactive, so anyone who qualifies under the new deal will receive back payments for the past three months. The proposal was crafted by Democrats Dick Durbin, Cory Booker, Sherrod Brown, Jeff Merkley and Jack Reed, and Republicans Rob Portman, Lisa Murkowski, Dean Heller, Susan Collins and Mark Kirk. They apparently did so in secret, as most of their Senate colleagues were completely unaware that a deal was even in the works.

As far as the details of the bill go, there’s some good stuff mixed with some bad. On the good side, it includes a provision that prohibits anyone making over a million dollars a year from collecting unemployment benefits. That probably should have been in the first unemployment insurance bill that Congress ever passed, but hey, better late than never. On the downside, it pays for the benefits, in part, through a truly stupid mechanism known as “pension smoothing.” As Bustle explained last month, it’s the epitome of smoke and mirrors:

[I]n essence, pension smoothing makes companies with pension funds pay a higher income tax now, for the next couple of years, in exchange for paying a lower tax rate in later years, which results in a bit more revenue in the short run — and higher deficits in the long run. It’s widely considered an illusory, irresponsible maneuver, and is in fact one of the very few budget policies that both liberal and conservative economists hate equally. (Yay bipartisanship!)

Nevertheless, this may be the golden ticket to getting the bill passed in the House. Speaker John Boehner has said that he’ll consider putting any UI extension bill up for a vote if it’s fully paid for. Thanks to pension smoothing, the proposal does indeed pay for itself, even if it’s essentially by borrowing money from future tax revenue.

The Senate is set to vote on it after its recess next week. According to Reed and Heller, who spearheaded the effort, it has more than enough votes to overcome a GOP filibuster.