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Bush Signs Jobless Benefits Extension

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By JIM ABRAMS

The Associated Press

Published: November 22, 2008

Updated:

WASHINGTON - With no end in sight to economic bad news, President George W. Bush on Friday ensured that millions of laid-off workers will keep getting their unemployment checks as the year-end holidays approach.

Bush signed an extension of jobless benefits into law just before 8 a.m., as he was preparing to leave the White House for a morning flight to Lima, Peru, to attend the 21-nation Asia-Pacific Economic Cooperation forum.

Congressional leadership rushed the bill to the White House after it was approved Thursday to make the unusually quick bill signing possible before Bush left the country.

Also Friday, the Federal Deposit Insurance Corp. formally approved a plan to guarantee up to $1.4 trillion in U.S. banks' debt for more than three years as part of the government's financial rescue package. The program is meant to break the crippling logjam in bank-to-bank lending by guaranteeing the new debt in the event of payment default by the issuing bank.

Meanwhile, the Dow Jones industrials rose 494 points Friday, after dropping more than 400 points on each of the two previous days to reach the lowest level in more than five years. In part, investors were discouraged by the inability of the White House and Congress to agree on a plan to provide relief to the battered auto industry.

Democrats had sought to carve out $25 billion from the $700 billion financial rescue plan to keep the auto industry in business through next spring, but the White House and Senate Republicans objected.

Earlier in the year, Bush also expressed doubts about further benefit extensions, but he came to support the legislation as new figures showed new claims for jobless aid had reached a 16-year high.

In what could be its last vote of the year, the Senate approved a measure Thursday that would provide up to three months of extra benefits for those whose unemployment benefits have run out or are about to expire. The House passed the bill in October.

Democratic leaders said they were ready to come back into session on Dec. 8, but only if the Big Three automakers first come up with a roadmap showing how federal aid will put them on the path to future economic viability.

At stake are millions of jobs in the auto and related industries that could go under if one or more of the major automakers goes bankrupt.

Other federal actions to resuscitate an economy crippled by home foreclosures, a credit freeze and confusion in financial markets will probably have to wait until January.

President-elect Barack Obama has vowed to make economic recovery the immediate focus of his administration, and the House and Senate will have increased Democratic majorities eager to support him.

About 1.2 million people would exhaust their unemployment insurance by the year's end without the extension, sponsors said. The measure is estimated to cost $5.7 billion, although economists put the positive impact at $1.64 for every dollar spent on jobless benefits because the money helps sustain other jobs and restores consumer confidence.

The legislation as approved provides seven additional weeks of payments to people who have exhausted their benefits or will exhaust them soon. Those in states where the unemployment rate is above 6 percent will be entitled to an additional 13 weeks above the 26 weeks of regular benefits. Benefit checks average about $300 a week nationwide.

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