Senate OKs extension of jobless benefits, homebuyer tax credit

11/5/2009

WASHINGTON - Recognizing that a weak economy still needs a government boost, the Senate voted overwhelmingly yesterday to provide the jobless with up to 20 weeks in additional unemployment benefits and expand a first-time homebuyer tax credit to include a far larger pool of people entering the dormant housing market.

The $24 billion bill, passed 98-0, also provides tax relief for struggling businesses. It comes to the rescue of more than 1 million out-of-work people who will run out of benefits by the end of the year.

Everyone will receive 14 weeks of additional benefits, while those in states with unemployment rates of 8.5 percent and above get six weeks on top of that. Ohio and Michigan fall into that category.

The legislation now goes to the House, which is expected to quickly send it to President Obama for his signature.

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.

The $8,000 tax credit for first-time homebuyers, enacted as part of the stimulus package last February and set to expire this month, would be extended and expanded to include a $6,500 credit for people who have lived in their current residences at least five years.

Congress has no choice but to act when there are 15 million jobless chasing 3 million jobs and 7,000 people run out of benefits every day, said Senate Finance Committee Chairman Max Baucus (D., Mont.).

Economists talk about the end of the recession, he said, but "for most Americans, it will still be some time before things start getting better."

House Majority Leader Steny Hoyer (D., Md.) said yesterday that the bill was "vital to Americans who have lost their jobs as a result of the deepest recession in over three-quarters of a century" and he planned to bring it to the floor for a vote as early as today.

The legislation would extend the $8,000 tax credit through June of next year as long as the buyer enters into a binding contract before April 30. It doubles the income ceiling for qualification to $125,000 for individuals. The credit is available for homes purchased at under $800,000.

The third leg of the bill extends to all businesses that have incurred losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years.