President Obama Signs Jobless Aid, Flood Insurance Extension

By | April 15, 2010

Congress Thursday voted to restore jobless benefits for hundreds of thousands of Americans who had lost them during a partisan standoff in the Senate over spending.

[The bill also reauthorizes the federal flood insurance program until the end of May and restores federal COBRA health insurance subsidies.]

The House of Representatives voted 289-112 to restore the lapsed programs and sent the measure to President Barack Obama, who signed it into law. The Senate had approved it earlier in the day after weeks of delay.

With the unemployment rate at 9.7 percent, some 6.1 million Americans rely on jobless benefits. Those benefits, which average roughly $300 a week, expired for more than 200,000 Americans on April 5 after Republican Senator Tom Coburn blocked a vote shortly before Congress left town on a two-week break.

The standoff also has disrupted a federal flood insurance program, which has held up 1,400 home sales each day in flood-prone areas and slashed emergency loans to small businesses, Democrats said.

COBRA health insurance subsidies for the unemployed and payments to doctors under the Medicare health program have also been disrupted.

[The provision reauthorizing the National Flood Insurance Program (NFIP) is effective retroactively to Feb. 28 and extends the program until May 31, 2010, the day before the new hurricane season officially starts. Forecasters have warned that this coming season could be one with above-average storm activity.

The Independent Insurance Agents & Brokers of America (Big “I”) said it is concerned that Congress has only extended the program for a brief period again.

Congress failed to extend the NFIP before leaving for recess last month, resulting in the program’s expiration on March 28. Since March 29, the program has been in what the Federal Emergency Management Agency (FEMA) calls a “hiatus period”, meaning that no flood insurance policies could be issued or renewed. In addition, existing policyholders could not increase their coverage. This was the second lapse in flood insurance coverage this year. The NFIP also expired on Feb. 28, 2010, but Congress did not reauthorize the program until March 2.

“It is alarming that the NFIP was allowed to expire, causing so much confusion and potentially leaving desperate homeowners and small businesses unprotected for more than two weeks,” said Robert Rusbuldt, Big “I” president and CEO. “The Big ‘I’ is greatly concerned that these short expiration periods, coupled with the uncertainty of temporary extensions, will negatively impact the market.”

Since the extension is retroactive, any new policy applications or renewals that were signed and submitted during the hiatus will be effective from the date of application or, in the case of waiting periods, the waiting period will start from the date of application, according to the agents’ group.

“This series of temporary extensions, last minute actions and service lapses during such a delicate period in our economy is of great concern to our agents, homeowners and small businesses,” said Charles Symington, Big “I” senior vice president of government affairs. “Though we are grateful that Congress extended this program, we are increasingly frustrated by these repeated one-month extensions and the periods of expiration that sometimes result from them.”

Insurers, too, expressed frustration with Congress.

“We are pleased that Congress made this a priority upon returning from recess this week,” said David A. Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI). “But these short putts down a long fairway set a dangerous precedent that leaves homeowners vulnerable. We need a long-term, sustainable solution to the flood program. Over 5.5 million Americans rely on this vital program.”]

REPUBLICAN OBJECTIONS

Coburn and other Republicans argued that Congress should find a way to pay for the unemployment benefits program rather than letting it add to a budget deficit that could hit a record $1.5 trillion this fiscal year.

“Our debt and deficits are as much of an emergency as unemployment, yet Congress continues to pretend it can spend and borrow without restraint,” Coburn said in a statement.

The Senate voted down Coburn’s proposal to redirect $20 billion from other government programs.

Democrats said jobless aid had always been considered emergency spending during times of high unemployment.

Three Senate Republicans — Susan Collins and Olympia Snow of Maine and Ohio’s George Voinovich– voted for the bill. In the House, Republicans were divided, with 49 voting for the bill and 112 voting against it.

Jobless benefits normally expire after six months, but Congress has extended the program several times during a slump marked by high levels of long-term joblessness.

Obama said he was “grateful” that Congress had moved forward on the temporary extension but urged lawmakers to extend the benefits further.

“As I requested in my budget, I urge Congress to move quickly to extend these benefits through the end of this year,” Obama said in a statement.

“I also urge Congress to move forward on legislation to help small businesses grow and hire and other measures to increase the pace of job growth,” he said. “This is my top priority, and I will fight day and night until every American who wants a good job has one.

The bill passed by the Senate would extend benefits through June 2 and apply retroactively to those cut off last week. It would cost $18.2 billion, according to the nonpartisan Congressional Budget Office.

Democrats have been extending the program on a month-to-month basis as they work on a longer-term fix.

That has given Senate Republicans plenty of opportunity for disruption.

Republican objections forced the Senate to spend most of the week on a measure that had been handled on a routine basis in the House. Democrats can expect to face similar delays on other spending measures that are not offset with spending cuts elsewhere, Coburn said.

REGULAR DEBATE TOPIC

The debate over spending is likely to resurface on a regular basis as the November congressional elections approach.

Republicans have pointed to record deficits and last year’s $863 billion economic stimulus package to paint Democrats as reckless spenders unconcerned with the country’s mounting debt.

Democrats say the country’s dire fiscal situation can be traced in large part to tax cuts, wars and an expansion of Medicare that were enacted when Republicans were in control.

“Those who talk about balancing budgets who have not balanced them in the past should not be trying to do so on the backs of hundreds of thousands of unemployed in our beloved country,” said Democratic Representative Sander Levin, who chairs the tax-writing Ways and Means Committee.

(Additional reporting by Deborah Charles; Editing by Eric Walsh and Peter Cooney)

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