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Unemployment Benefits to Expire June 2

It’s pretty certain, at this point in the discussion, that Congress will leave Washington today for a week-long Memorial Day break without passing legislation to extend a number of tax breaks and emergency unemployment benefits.

Not only have House Democrats — who’d hoped to have their bill wrapped up and delivered to the Senate by Wednesday — failed to rally the support of the budget hawks in their own party, but whatever the House does send over to the upper chamber, “Senate Republicans will not allow us to pass [this week] and maybe not ever,” said one Senate Democratic aide familiar with the negotiations.

As a possible Plan B, Senate Democratic leaders might offer a much smaller proposal Friday: a $4 billion package to provide a 14-day extension of the programs scheduled to expire next week while Congress is gone, including unemployment benefits, COBRA health benefits, payments to Medicare doctors, SBA loans and flood insurance. (None of the proposals under consideration would create new tiers of unemployment benefits.)

Trouble is, the Democrats don’t intend to pay for the short-term extensions with offsets elsewhere in the budget, meaning that Republicans will almost certainly object. (GOP leaders don’t reject the policies, but they want them paid for with unspent stimulus funds — a notion that Democrats oppose.)

There, in a nutshell, is the source of the stalemate — a stalemate that will allow these benefit provisions to expire, and force Democratic leaders to try to forge a deal that can pass both chambers quickly when they return to Washington June 7. The bill they produce, said the Democratic aide, will likely be retroactive.

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