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Senate passes bill extending homebuyer tax credit, unemployment benefits

Updated 7:22 p.m.
By Perry Bacon Jr.
The Senate on Wednesday approved a bill that extends several measures designed to spur the economy and help people who have lost their jobs, including a provision that will extend unemployment benefits for up to 20 weeks in states with high unemployment rates. It represented Congress's latest intervention to help the country through its worst recession in decades.

The bill, which passed 98 to 0, is likely to be approved by the House on Thursday and then be rapidly signed by President Obama. It would provide unemployment benefits of at least 14 weeks for people out of work, while those in the more than two dozen states with unemployment rates above 8.5 percent would receive up to 20 weeks of benefits.

The measure would also extend through April 30 a $8,000 first-time homebuyer tax credit and create a new $6,500 credit for homebuyers who have been in their current residence for the last five years or more.

Another provision allows businesses that had operating losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years.

"We know that when an economy recovers, the unemployment rate is one of the last numbers to rebound," said Senate Majority Leader Harry Reid (D-Nev.). "So even as our economy begins to turn around, jobs are turning around slower, and it is our responsibility to ensure the out-of-work are not left out in the cold."

The bill is part of a series of proposals Democrats are considering to help boost the economy and aid Americans who are out of work. While they are wary of casting the policies as a "second stimulus" -- the $787 billion bill passed earlier this year remains controversial for both its cost and the fact that unemployment remains high -- all of the provisions the Senate approved Wednesday were in the original stimulus legislation but set to expire. The money for this bill is a new appropriation, and not part of the $787 billion.

The bill had been delayed for weeks as Democrats and Republicans debated a number of issues not directly related to the provisions. Republicans unsuccessfully tried to attach a provision to end the Troubled Asset Relief Program, which was part of last year's effort to aid troubled financial firms.

More than 1 million people would have had their benefits ended without the extension, according to the National Employment Law Project, a nonpartisan group that tracks the issue. More than 15 million Americans are now unemployed, more than a third of whom have been out of work for more than six months.

With enactment, the jobless in the hardest-hit states could receive up to 99 weeks of benefits, which average about $300 a week. That would well exceed the previous record of 65 weeks during the 1970s.

Sen. Benjamin Cardin (D-Md.), who had strongly pushed the tax credit for purchasing a home, said, "While there are signs the housing market is stabilizing, there is much more to be done. The credit has succeeded in lessening the glut of homes for sale, but our economy is still hurting."

The Associated Press contributed to this report.

By Perry Bacon Jr.  |  November 4, 2009; 6:30 PM ET
Categories:  Economy Watch  
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Comments

So are these funds coming out of the existing stimulus bill, or is this another stimulus bill? Not arguing about extending benefits as that would make sense, which seems to have been left out of the original stimulus bill.

Posted by: Bubbette1 | November 4, 2009 6:53 PM | Report abuse

I guess I fall in the new donut hole (in house for less than 5 years). Silly social engineering.

BB

Posted by: FairlingtonBlade | November 4, 2009 6:58 PM | Report abuse

Yea, another handout of tax-payer money. Another incentive to NOT work. Another incentive to feed nay, live off the govt teet. Change nothing. Politics of buying votes all over. Sweet.

Posted by: docwhocuts | November 4, 2009 7:41 PM | Report abuse

when is obozo and the democrats going to get around to creating new jobs? Giving away fake government jobs only is welfare. All this government spending is from the taxpayer. When will the obozo/democrat government decrease business taxes to create some jobs?

Posted by: charlietuna666 | November 4, 2009 7:48 PM | Report abuse

Amazing...you mean that both Democrats and Republicans CAN WORK TOGETHER to do something positive.

To docwhocuts - be thankful that you HAVE a job today. As with my company, a layoff can be swift and not forseen.. Bankruptcy. These people aren't freeloaders.

Posted by: Pumpkin31 | November 4, 2009 7:52 PM | Report abuse

How congress really works for our benefit... unemployment bill was around $2 billion. Congress added because of real-estate lobbying for our own good an additional $22 billion.

The goal of merging the 3 things together (poor man's unemployment of $300/wk, housing tax credit and business tax loop hole (for builders)) is to empower unemployed people to be able to go buy a home with the $300/wk!... and to top it all off, the bill was passed 98 to 0 ... no questions of how all this fits together - it's all about the unemployment benefits - who would stop such a thing.

Some one ought to ask them to trim all this fat from the bill and unemployment bill focuses on unemployment benefits - let housing tax credits and builder tax breaks stand on their own feet - it's a typical let's get this under-the-radar.

Posted by: free_np | November 4, 2009 8:08 PM | Report abuse

Reporting from Los Angeles and Sacramento - Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners -- holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear.

========================================

Obozo and the democrats are going to do the same thing to the american taxpayer.

Posted by: charlietuna666 | November 4, 2009 8:09 PM | Report abuse

Only someone with an idiot's understanding of economics would credit extension of unemployment benefits as something that would SPUR the economy.

If there is any effect, it is too keep the economy from deteriorating further. There is no "stimulus" to our economy when the government issues borrowed money to pay people for not working.

Posted by: Curmudgeon10 | November 4, 2009 8:21 PM | Report abuse

Ummmm....Message To Mike Steele!

The teabaggers outside your office want to know why this passed the Senate, 98-0.

Posted by: SwellLevel5 | November 4, 2009 8:42 PM | Report abuse

I have a question! can someone please help me?
I was recieving "Emergency Benefits" under Tier 2, *7weeks, it was exprired few days ago, am i going to get another 7weeks? Or i will not?
I am still not working ....but mine was not regular unemployment, mine was Emergency benefit under Tier2.

Posted by: Hot28iny | November 4, 2009 9:49 PM | Report abuse

"extend unemployment benefits for up to 20 weeks"... we should also provide them with medical marijuana to complete the illusion!

Posted by: christopher7291 | November 4, 2009 10:47 PM | Report abuse

Anything which subverts deflation is a colossal mistake. Nearly all goods and services are vastly over priced. Homes are among the worst, when it comes to being over priced.

http://TheLastGoodIdea.blogspot.com

Posted by: PSURoss | November 6, 2009 2:47 PM | Report abuse

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