Congress extends jobless benefits, stocks sink
By JIM ABRAMS
Associated Press
November 21, 2008
WASHINGTON (AP) -- Jarred by new jobless alarms, Congress raced to approve legislation Thursday to keep unemployment checks flowing through the December holidays and into the new year for a million or more laid-off Americans whose benefits are running out.
The economic picture was only getting worse, if Wall Street was any indication. The Dow Jones industrials dropped more than 400 points for a second straight day, reaching the lowest level in more than five years, and the Standard & Poor's 500 index fell below lows established six years ago.
The Senate's vote followed Thursday's government report that laid-off workers' new claims for jobless aid had reached a 16-year high and the number of Americans searching for work had surged past 10 million.
The White House, which had opposed broader legislation containing the benefits extension, urged passage of the new version and said President George W. Bush would quickly sign it.
As Congress prepared to leave town -- perhaps for the year -- there was no such resolution on helping the auto industry, a disaster in the making that could lead to hundreds of thousands if not millions of additional lost jobs. Democratic leaders said they could return to Washington in mid-December to vote on rescue loans if the carmakers first present a plan on transforming and modernizing their operations.
Discouraged by the stalemate over auto aid, investors sent the Dow Jones industrials down to another big loss, 445 points.
As for the jobless benefits, about 1.2 million people would exhaust their unemployment insurance by the end of the year without the extension, sponsors said. The measure is estimated to cost about $5.7 billion, although economists put the positive impact at $1.64 for every dollar spent on jobless benefits because the money helps sustain other jobs and restores consumer confidence.
"Putting money in the hands of unemployed families means they will be able to pay their rent and utility bills, buy groceries and clothe their children," Sen. Dick Durbin, D-Ill., said after the voice vote in the Senate. "It is money that will create economic growth in America."
The House had approved the bill in October.
More than 1.2 million jobs have been lost so far this year, and the civilian jobless rate is at a---year high of 6.5 percent.
Thursday's Labor Department report said claims for unemployment benefits jumped last week to 542,000 the highest level since July 1992 and fresh evidence of a rapidly weakening job market that is expected to get even worse next year.
The legislation as approved would provide seven additional weeks of payments to people who have exhausted their benefits or will exhaust them soon. Those in states where the unemployment rate is above 6 percent would be entitled to an additional 13 weeks above the 26 weeks of regular benefits. Benefit checks average about $300 a week nationwide.
The benefits provided would be in addition to 13 weeks of federally funded extended benefits approved by Congress last June.
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