Will unemployment benefits get left behind in budget deal?

With the deadline fast approaching for congressional negotiators to set a budget for the next year, a major issue stands to get left out in the cold: emergency unemployment benefits.

The federal program, which was passed in 2008 when the recession began to take hold and has been extended ever since, is set to expire on Dec. 28. A White House report released Thursday said 1.3 million people would lose their benefits at the end of the year and 3.6 million more could lose access to the benefits beyond 26 weeks by the end of 2014 if the program is not renewed. The report also says it could cost the economy 240,000 jobs in 2014 due to reduced demand for those job-seekers who see their incomes cut.

Congressional negotiators are still struggling to reconcile House and Senate budgets that were just $91 billion apart in dollar figures but separated by a deep chasm in ideology. Most members of the committee share the goal of offsetting some of the automatic, across-the-board spending cuts mandated by sequestration, for example, but Democrats would like to do so by raising revenue and Republicans would like to find further cuts to domestic programs and reform entitlement programs in order to restore some of the lost money for defense spending.

News reports about the latest progress indicate that lead negotiators Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., are working on an agreement that would replace the sequester with a combination of other spending cuts and new revenue through fee increases.

But they aren’t there yet. “Paul Ryan came in today, gave us an update on where they were. I'm hopeful that they'll be able to work this out, but there's clearly no agreement,” House Speaker John Boehner, R-Ohio, told reporters Thursday. He said he was “hopeful” that Ryan and Murray would reach an agreement.

Throwing unemployment benefits into the mix could make it even more difficult to reach a deal. The Congressional Budget Office estimated Tuesday that extending unemployment benefits for another year would run the government more than $25 billion.”

Boehner, for his part, has put the onus on the president. “If the president has a plan for extending unemployment benefits, I'd surely entertain taking a look at it. But I would argue, the president's real focus ought to be creating a better environment for our economy and creating more jobs for the American people. That's where the focus is, not more government programs,” he said.

Democrats backed away Thursday from the idea of refusing to agree to a short-term budget agreement that didn’t include an extension of the unemployment benefits. Thursday morning, House Minority Leader Nancy Pelosi, D-Calif., told reporters, “We cannot, cannot support a budget agreement that does not include unemployment insurance.” But at a press conference with Democratic leadership a few hours later, clarified those remarks, saying, “As we go forward with the budget, I wanted to see unemployment insurance in there,” Pelosi said. She said it could be “separate” from a budget deal.

“It doesn’t have to be in the same legislative agreement, but we want to see a commitment and a way that we’re gonna get that done by the end of this year,” added Rep. Chris Van Hollen, D-Md., the top Democrat on the House Budget Committee.

Democrats held a hearing Thursday to press the issue, trying to ensure it doesn’t get lost in the flood of unfinished business at the end of the year before lawmakers head home for a long break. On top of the budget deal, lawmakers are still trying to hammer out an agreement on the farm bill.

"If every member of Congress would take even a few minutes to speak personally with unemployed workers, there would not be any question at all about the need to extend the federal emergency unemployment program," Rep. Sandy Levin, D-Mich., the top Democrat on the House Ways and Means Committee, said at the hearing.

The budget negotiators have been instructed to set a budget by Dec. 13 in order to allow both chambers to vote. If they fail to reach an agreement, or cannot strike a deal that can pass both the House and the Senate, the government is at risk of another shutdown when funding runs out after Jan. 15.