Senate negotiators were close to a deal on extending expired jobless benefits through November and paying the estimated $18 billion cost through future spending cuts, a senior Senate Democratic aide said on Thursday.
The potential deal, which was still under discussion, could be unveiled by Senate Majority Leader Harry Reid later on Thursday.
Part of the $18 billion cost would be achieved by extending automatic spending cuts, known as “sequestration,” meaning that the savings would be achieved years from now. Other savings would be attained by tightening some requirements for people who collect both jobless benefits and disability payments, the aide said.
The negotiations were being led by Democratic Senator Jack Reed of Rhode Island and Republican Senator Dean Heller of Nevada. They were consulting closely with Reid and Senate Budget Committee head Patty Murray.
Federal jobless benefits expired on December 28, leaving more than 1.3 million long-term unemployed people without an average of $300 in weekly payments.
Reid said that since then, the number has grown to about 1.4 million.
At a news conference earlier on Thursday, Reid was upbeat about prospects for a deal. “I’m cautiously optimistic that in the next few hours we can maybe work out some long-term solution to this issue – long term being more than three months.”
Democrats have been pushing for a one-year extension of the expired benefits while Republicans have said they would go along with a three-month renewal, but only if the costs were covered.
The Democratic aide, who asked not to be identified, said that the sequestration savings would be applied to “mandatory” programs, such as federal payments to doctors and other healthcare providers participating in the Medicare program.
The across-the-board sequestration savings of $1.2 trillion that began early this year spanned a decade. The additional savings would be tacked onto the end, meaning that they would be achieved in 2024.
Ironically, Congress, in a budget deal enacted last month, began rolling back some of those meat-ax-approach savings that many lawmakers complained were hurting necessary military and domestic programs.
Some lawmakers have called for repealing all of the across-the-board cuts and substituting more targeted savings. But Congress has been unable to agree on a long-term replacement.
If the deal is struck on renewing the jobless aid and the full Senate approves it, the Republican-controlled House of Representatives also would have to sign off.
House Speaker John Boehner has set forth two requirements for any extension of jobless benefits: that the cost be covered and that it be accompanied by legislation to create jobs.