With the jobless rate hovering just over 7 percent, congressional Republicans said Tuesday that they are ready to let emergency unemployment benefits lapse on Dec. 31, immediately cutting off checks to more than a million recipients.
“I don’t see much appetite from our side for an extension of benefits. I just don’t,” said Rep. Tom Cole (R-Okla.), a close ally of House Speaker John A. Boehner (R-Ohio) and a member of the budget conference committee tasked with cutting a year-end deal on spending.
The conference panel, headed by House Budget Committee Chairman Paul Ryan (R-Wis.) and Senate Budget Committee Chairman Patty Murray (D-Wash.), was closing in on a deal to avoid another government shutdown in January and ease the sharp spending cuts known as the sequester, according to senior aides in both parties.
The potential agreement still faces significant hurdles, including continued requests by Republicans for cuts to Medicaid, Democrats said. But if the plan comes together, senior Republicans said it would provide at least $45 billion in fresh funds to the Pentagon and other agencies in the current fiscal year and push the spending cap for all agencies over $1.015 trillion in fiscal 2015.
In theory, the cost of those increases would be more than covered by raising a variety of fees and trimming contributions to retirement benefits for federal workers. Aides said that negotiators were still struggling to lock down details, but that House leaders were pressing for a deal by the end of this week.
That would permit the House to vote on the plan next week and adjourn for the holidays on schedule Dec. 13.
If Ryan and Murray fail to reach agreement, Boehner told his troops in a closed-door meeting Tuesday morning that he is inclined to let the House vote on a plan to fund the government through the current fiscal year with the sequester in place.
Republicans do not want to return to their districts with the threat of a government shutdown still looming. Rep. James Lankford (R-Okla.), a junior member of the leadership, said that lawmakers want to “act early” and that “serious conversations” are focused on either reaching a budget deal or approving a short-term funding measure.
The Senate is not in session this week, but Murray cut short her Thanksgiving break and returned to Capitol Hill on Tuesday to continue negotiations.
So far, Ryan and Murray have steered clear of an array of potentially contentious issues that require congressional action before the end of the year, aides said. They are not counting on savings from scaling back farm subsidies, for example, which is under consideration by a separate conference committee at work on a new farm bill.
Likewise, negotiators have left open the question of unemployment benefits, with aides saying it is likely to be decided if any deal is presented to Boehner and Senate Majority Leader Harry M. Reid (D-Nev.).
Since 2008, when the fiercest recession in modern times took hold and began driving the unemployment rate to a peak of 10 percent, the federal government has ensured that unemployed workers in hard-hit states could receive as much as 99 weeks of benefits, with states paying for the first 26 weeks.
The federal program has since been scaled back, with most states now offering up to 63 weeks of aid. Illinois and Nevada offer 73 weeks, according to the Center on Budget and Policy Priorities.
But on Dec. 31, the program is scheduled to end, immediately cutting off an estimated 1.3 million beneficiaries, according to the nonprofit National Employment Law Project, which advocates on behalf of the unemployed.
Extending the program through 2014 would cost about $25 billion, the nonpartisan Congressional Budget Office said Tuesday, but would boost employment by roughly 200,000 jobs by the end of next year.
Rep. Chris Van Hollen (D-Md.), who also serves on the budget conference committee, argued that extending benefits should be part of any deal.
“This CBO report shows that failure to extend unemployment compensation will not only hurt struggling families, but will also cost the economy 200,000 lost jobs,” Van Hollen said in a statement. “Congress should not leave town until we extend unemployment insurance and replace the sequester. Failure to act on those two priorities will result in one million fewer jobs by this time next year — that would be a self-inflicted wound that we cannot afford.”
Paul Kane contributed to this report.