Congress passes a bill to shore up depleted programs

WASHINGTON - Congress yesterday came to the rescue of three recession-hit programs, including aid for unemployment benefits, that face serious disruptions in services while lawmakers are on vacation in August.

Lawmakers, eyeing their departures from Washington, moved with unusual speed to approve the three-part package that adds $7 billion to the highway trust fund, replenishes the federal unemployment insurance trust fund, and gives new lending authority to Federal Housing Administration programs that play a large role in providing low-interest housing loans.

All three are at risk of running short of money in August.

The Senate passed the measure, 79-17, yesterday, a day after it won overwhelming approval in the House. It now goes to President Obama for his signature.

Senate supporters of the bill first had to defeat several Republican amendments that would have used unspent money from the $787 billion economic-stimulus act to strengthen the highway and unemployment funds.

GOP senators argued that some of the stimulus money will not be spent for a year or two and that the bill, which transfers money from the general treasury to the trust funds, adds to the federal deficit. There is no set amount for the infusion into the unemployment insurance fund, but it was estimated that it would need about $7.5 billion to help state unemployment programs that are insolvent.

Sen. Barbara Boxer (D., Calif.) said the Republicans were "slashing funds from the stimulus program that has one purpose and that purpose is to create jobs."

Sen. Jack Reed (D., R.I.) said that without the legislation, his state - one of 18 that have depleted their unemployment compensation budgets - "and many other states would look to a real crisis in which they would fail to be able to respond to this need for unemployment compensation."

States generally offer 26 weeks in unemployment benefits, averaging around $300 a week. Congress, in the stimulus act and other legislation, has extended the time for receiving benefits and has increased payments.

The bill also raises the ceiling for the FHA's mortgage-insurance program for this fiscal year from $315 billion to $400 billion. The securities guarantee authority for the Government National Mortgage Association - or Ginnie Mae - would increase from $300 billion to $400 billion.

The FHA became the main source of home loans to borrowers with poor credit and low down payments after the collapse of the subprime-lending market.

The highway trust fund, made up of revenue from fuel taxes drivers pay at the pump, is the source for the $40 billion the federal government spends every year on roads, bridges, and transit projects.

The fund's balances have steadily declined in recent years because people have been driving less during the recession and buying more fuel-efficient cars and because Congress has refused to raise the federal fuel tax - 18.4 cents a gallon or 24.3 cents for diesel - since 1993 despite inflation and soaring construction costs.