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House backs jobless aid, cuts health-insurance help

Deficit worries forced Democratic leaders to scale back. The Senate will take up action after a weeklong recess.

WASHINGTON - The House on Friday voted to extend unemployment benefits to people mired in joblessness, but lawmakers cut off help with health insurance for the newly unemployed.

Money to assist with health insurance was among the tens of billions of dollars trimmed from programs introduced in last year's economic-stimulus bill.

The 215-204 vote to approve the measure capped a turbulent week for Democratic leaders, who were forced by party moderates and conservatives unhappy with continued deficit spending to kill $24 billion in aid to cash-starved states and $7 billion for the health-insurance subsidies for laid-off workers.

The unemployment-insurance extension anchored a grab bag of unfinished business, including numerous spending measures and a renewal of more than 50 tax breaks for individuals and businesses.

Despite the House action, Democrats will miss their self-imposed deadline of passing a jobless-benefits measure before Memorial Day. The Senate left Washington on Friday for a weeklong recess before the measure passed the House. The Senate is to act on the package during the week of June 7, after it returns.

The House's extension of jobless benefits would continue funding through Nov. 30. Before the Senate acts, some jobless benefits will begin to expire Monday, at a time when the national unemployment rate hovers near 10 percent.

People who have been out of a job for more than six months will gradually lose eligibility for additional weeks of benefits that are fully financed by the federal government. The first six months of unemployment benefits would not be affected, since they are the responsibility of the states.

About 200,000 people per week are set to begin losing jobless benefits when the extension of unemployment insurance expires next week, though lawmakers are likely to seek to restore them after the Senate acts.

Lawmakers also approved, by 245-177, a $22 billion provision to delay a scheduled 21 percent cut in Medicare reimbursements to doctors until 2012. That action brought the deficit cost of the bill to $54 billion, according to the Congressional Budget Office.

A version circulated last week would have added $134 billion to the deficit and immediately came under assault.

The move to drop the aid to states was a big blow to the nation's governors, who are desperate for fiscal relief as weak tax revenues are forcing painful cutbacks.

Democrats say that continuing unemployment benefits would not only help the jobless but also provide a boost to the economy since the money is typically spent immediately and spurs demand.

Republicans countered that the tax increases to partially pay for the measure - including $11 billion from quadrupling to 34 cents the per-barrel tax that oil companies pay into the Oil Spill Liability Trust Fund - are job killers.