Democratic efforts to spur job creation advanced in Congress today as a $149 billion package of tax breaks and unemployment aid cleared a procedural hurdle in the Senate.
The 66 to 34 vote allows the Senate to move toward a final vote for the bill, part of what Democrats call a "jobs agenda" to bring down the country's 9.7 per cent unemployment rate before November congressional elections.
The Senate is expected to pass the bill within the next few days and send it to the House, where many Democratic lawmakers have pushed for more aggressive job-creation measures.
The bill largely continues existing government policies. Jobless workers would their see unemployment aid and healthcare subsidies extended to the end of the year, while businesses would once again benefit from $25 billion worth of tax breaks that expired at the end of 2009.
Cash-strapped states would get $25 billion to help cover their portion of the Medicaid healthcare programme for the poor.
The bill raises at least $37 billion by closing tax loopholes to offset the $149 billion in new spending. That could conflict with president Barack Obama's plans to use the new revenue to help pay for his proposed healthcare overhaul.
The US economy has shed 8.4 million jobs since entering recession in December 2007, though the pace of job loss has slowed since the recovery began in the second half of last year.
More than four in 10 of the unemployed have been out of work for more than six months, the usual limit for unemployment aid. Congress has extended the program to cover those out of work for nearly two years in some high-unemployment areas, but millions could still exhaust their benefits as soon as next month without a further extension.
Economists say that unemployment aid is one of the most cost-effective ways to stimulate the economy because recipients spend the money quickly.
But it is not cheap. Extending the programme through the end of the year would cost $70 billion. Many Republicans voted against the measure on the grounds that it should cut spending elsewhere to cover all of its costs.
Reuters