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UPDATE: Missouri Senate embraces extension of jobless benefits

Thursday, April 7, 2011 | 7:08 p.m. CDT

JEFFERSON CITY — Thousands of Missouri residents cut off of federally funded jobless benefits soon could regain eligibility under a plan embraced Thursday by the state Senate — but their gain could come at the expense of people laid off in the future.

Several Republican senators upset about federal spending ended a filibuster Thursday against legislation renewing the federal long-term benefits, but only after the Senate voted to cut state jobless benefits by six weeks, to a maximum of 20 weeks instead of 26 weeks. As part of the deal, Senate President Pro Tem Rob Mayer also pledged to help the filibustering senators identify $250 million of federal stimulus spending that can be cut from the state's budget.

Republicans who had held up the unemployment legislation declared it a victory — though the outcome was not what they had demanded a day earlier when they called on Democratic Gov. Jay Nixon to first join them in eliminating $300 million of federal stimulus spending.

"My goal from the beginning was to send back as much stimulus money as possible — borrowed money from the federal government — and that's what we accomplished," said Sen. Jim Lembke, a Republican from St. Louis, who led a group of four filibustering senators.

About 10,000 Missouri residents who have been without work for a year and a half lost their federally funded unemployment benefits when the state's participation in the program expired Saturday because of the blockade against the reauthorization legislation. Those benefits could be restored retroactively if Missouri passes a bill. The legislation also could secure extended jobless benefits for an additional 24,000 people projected to become eligible in the next nine months. At stake is an estimated $105 million in benefits for Missouri residents.

The payments come from a federal program that provides 20 additional weeks of jobless benefits to people who already have been out of work for 79 weeks. About three dozen states are participating in the program. Seven other states with unemployment rates high enough to be eligible have not passed legislation allowing them to participate. But until Missouri's eligibility ended because of the filibuster, no state that joined the federal program had later voluntarily quit it.

Several other states have recently sought to cut back on their state-level unemployment benefits — a move that would reduce the amount of money businesses must pay into state unemployment insurance trust funds. Michigan last week became the first state to cut its maximum state jobless benefits from 26 weeks to 20 weeks. Arkansas has passed legislation to shave a week of its state jobless benefits. The Florida House also voted to cut state jobless benefits by six weeks.

Missouri's benefit cut would apply to people hired after the legislation is enacted who then later get laid off. Those people still would be eligible for federal jobless benefits after their 20 weeks of state benefits run out.

The Missouri Senate adjourned Thursday after adopting its plan by a voice vote and sending the bill to a committee that reviews the financial estimates of legislation. A final Senate vote is expected next week. The bill, which previously passed the House without the state benefit cut, would have to clear the House again before going to the governor.

The House sponsor, Republican Rep. Barney Fisher of the western Missouri town of Richards, said he hopes the House will agree to the Senate version and send it to the governor.

Nixon spokesman Scott Holste declined to comment Thursday on whether the governor would accept a cut in state jobless benefits. Nixon held a news conference last week calling on senators to pass an extension of the federal benefits.

"If a bill reaches the governor's desk, it will receive a comprehensive review," Holste said.

Reaction to the Senate compromise varied from praise to disdain among interest groups that have been involved in the legislation.

The National Employment Law Project, which coordinated an e-mail campaign urging Missouri's filibustering senators to stand down, called the Senate plan "fundamentally flawed."

"It's an unfair trade-off," said Rick McHugh, an attorney for the New York-based group. "You're making future jobless workers experience a cut to pay for a benefit that's already being paid for by the federal government."

The Missouri Chamber of Commerce and Industry called it a "smart compromise." As unemployment rates have risen, Missouri has borrowed $862 million from the federal government to pay its state jobless benefits.

"The legislative action could mean millions in savings at a time when Missouri's unemployment insurance trust fund is insolvent," said Dan Mehan, the chamber's president and CEO.


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