House approves pared-back tax and spending bill

WASHINGTON — The House on Friday voted to extend unemployment benefits to people mired in joblessness but 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 health insurance subsidies for laid-off workers.

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

Despite House action, Democrats will miss their self-imposed deadline of passing a jobless benefits measure before Memorial Day. The Senate left Washington Friday for a weeklong recess before the measure passed the House.

It'll be the third time this year that a program providing unemployment checks to people will have lapsed, though only a small fraction of the 11 million people receiving unemployment benefits have been affected.

The weeklong turmoil in the House reflected increasing anxiety among fiscally conservative "Blue Dog" Democrats unhappy about adding to the deficit as the national debt closes in on $13 trillion. A version circulated last week would have added $134 billion to the deficit and immediately came under assault.

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.

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, including layoffs and furloughs of state workers. Many states had already incorporated the money into their budgets for next year.

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

"With this vote, we can help families across the country and continue the path we set out on last year to help dig the country out of a terrible recession," said Rep. Louise Slaughter, D-N.Y.