Deal reached in Senate to renew jobless benefits

By Thomas Ferraro WASHINGTON (Reuters) - A bipartisan deal to renew long-term jobless benefits for more than 2 million Americans was reached on Thursday by a group of 10 U.S. senators, five Democrats and five Republicans. The measure would extend benefits by five months, dating back to December when the relief began to expire for those who have been out of work for six months or more. Sponsors of the legislation said they expect to have more than enough votes to pass the measure when the Senate returns from its week-long recess, set to begin on Friday. If and when the Democratic-led Senate passes the bill, it would go to the Republican-led House of Representatives for final approval. Republicans had blocked earlier efforts to extend the benefits amid disputes over the cost and how long the relief should be extended. "There are a lot of good people looking for work and I am pleased we're finally able to reach a strong, bipartisan consensus to get them some help," said Democratic Senator Jack Reed of Rhode Island. He and Republican Senator Dean Heller of Nevada are chief sponsors of the legislation. Backers of the legislation say the benefits will help the jobless and give a boost to the U.S. economy by pumping money into it. Relief to the unemployed averages about $300 a week. The new deal would cost about $10 billion, which would be covered by a series of offsets, including so-called pension smoothing, an accounting procedure that allows companies to use historic interest rate averages to determine pension contributions. That increases profits as well as taxable income, which produces federal revenue that could be used to pay for the jobless benefits. Employers in the United States added 175,000 jobs to their payrolls in February, but the unemployment rate rose to 6.7 percent from a five-year low of 6.6 percent the month before as Americans flooded into the labor market to search for work, according to the Labor Department. The senators' agreement includes a provision that would prohibit paying unemployment benefits to anyone who has earned at least $1 million in income the previous year. The provision was modeled after one earlier drafted by Republican Senator Tom Coburn of Oklahoma. It received unanimous Senate support in 2011, but never became law. According to 2009 federal tax income data, as many as 2,300 households that reported income of more than $1 million received jobless benefits, which lack means-testing. (Reporting by Thomas Ferraro; Editing by G Crosse and Mohammad Zargham)

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