Hatch: GOP willing to extend unemployment benefits

Washington • Sen. Orrin Hatch says Republicans are willing to extend unemployment benefits — even if the cost adds to the deficit — as part of a deal to keep a series of tax cuts in place for a few years.

Hatch, the incoming ranking member of the Finance Committee, appeared on CNN's "State of the Union" on Sunday.

"We are going to have to do unemployment insurance, no question, even though we are 100 weeks into unemployment insurance," Hatch said.

President Barack Obama has been negotiating with Republican leaders on a deal that would extend the tax cuts passed under President George W. Bush in 2001 and 2003, which are set to expire at the end of the year. Democrats have wanted to keep those cuts for only people making less than $250,000, and an alternative plan would eliminate the cuts for people making more than $1 million. Both proposals failed in test votes taken by the Senate on Saturday.

Republicans want all of the tax cuts extended permanently, saying raising taxes in a recession is poor economic policy.

"Neither side has the votes to get what they want," Hatch said. "I think we are going to have to kick it over for about two years."

Obama is willing to do that but has sought to tie an extension of the Bush tax cuts to an extension of unemployment insurance, which expired Tuesday. He also wants to add a renewal of his signature Make Work Pay tax credit that was part of the economic stimulus bill.

A new White House report says if Congress fails to act on unemployment benefits, about 6.7 million people nationwide and 28,000 out-of-work Utahns may lose their government checks starting in January. And White House economists argue that without the benefit, the state would lose about 2,500 jobs in the next year. Obama has sought a one-year extension of benefits for those who remain out of work.

In normal economic times, the unemployed can receive government assistance for 26 weeks, but since the recession, the government has extended the benefit multiple times. The most a person could receive in Utah is $451 a week.

"Extending this support to those hardest hit by this crisis is not only the right thing to do, it's the right economic policy," said Austan Goolsbee, the chairman of the White House Council of Economic Advisers.

Republicans have been open to an extension of unemployment, but they have wanted Democrats to cover the cost with cuts elsewhere. Hatch said on CNN that the GOP is ready to budge on that as well, but may not be willing to extend Obama's Make Work Pay tax credit.

"Let's take care of the unemployment compensation, even if it isn't backed up by real finances, we've got to do it," he said "If you want to go beyond that, things are going to break down."

Sen. Ron Wyden, D-Ore., also appeared on the program. He said: "I would be willing to go along with a one-year extension" of the Bush tax cuts.

He doesn't want to go further than that because he's pushing a bill to revamp the entire tax code.

"This is a town driven by a culture of procrastination. If you don't force fast action, what you will end up doing is kicking the can down the road," he said.

Hatch didn't seem interested in Wyden's plan, at least not in the short-term.

"It's not going anywhere," he said.

mcanham@sltrib.com —

Parties move toward compromise

Washington • Their political options limited, Democrats and Republicans appeared to unite Sunday behind the outlines of an economic package that would temporarily extend expiring tax rates to all taxpayers as well as jobless benefits for millions of Americans.

Differences remained over details, and some Democrats continued to object to any plan that would continue Bush-era tax rates at the highest income levels.

Without action, Congress faced the prospect of letting the tax rates revert to higher pre-2001 and 2003 levels, and delivering a tax hike to all taxpayers. Negotiations between the Obama administration and a bipartisan group of lawmakers centered on a two-year extension of current rates.

— The Associated Press