02/04/2014 05:35 pm ET Updated Feb 04, 2014

Senate To Vote On New Unemployment Bill That Targets Millionaires

WASHINGTON -- The Senate will vote Thursday on new legislation to restore unemployment insurance for more than a million workers whose benefits stopped short last month.

To win Republican votes, Sen. Jack Reed (D-R.I.) announced that the bill would ban millionaires from receiving unemployment insurance, a proposal that has previously won unanimous support in the Senate but did not become law.

"This will be a crucial vote and a critical test of whether Congress can listen to the American people and come together to do what is in the best interest of our economy," Reed said in a press release.

Reed's legislation will revive the benefits for three months, rather than the full year Democrats had previously demanded. It's unclear if enough Republicans will support the legislation for Democrats to overcome the 60-vote threshold required to break a GOP filibuster. Even if it passed the Senate, the measure would face long odds in the House.

As it normally does when the economy tanks, Congress gave the unemployed extra weeks of benefits in 2008, reauthorizing the federal compensation several times until letting it expire in December for 1.3 million workers. Without federal benefits, state-funded jobless aid lasts six months. Each week since the federal insurance lapsed, another 70,000 workers reached the end of their state benefits, bringing the total who've missed checks to 1.7 million.

Reed's office said the $6.4 billion cost of the benefits would be offset by "pension smoothing," allowing companies to make smaller pension contributions, resulting in higher profits and therefore more tax revenue for the government in the short term.

Republicans have insisted that the cost of another unemployment reauthorization be offset, but they have complained that Senate Majority Leader Harry Reid (D-Nev.) won't let them offer their own offsets or reforms to the unemployment insurance system.

That's where the millionaires come in. Unlike other safety net programs such as food stamps and Medicaid, Americans don't become eligible for unemployment insurance by being poor; rather, they have to have been laid off through no fault of their own after many months of employment. There is no income limit.

Reed's legislation would require workers to certify that their adjusted gross income wasn't more than $1 million in the previous year.

According to the Congressional Research Service, more than 3,000 Americans with annual incomes above $1 million received unemployment insurance in 2010. Banning the millionaires would save only $20 or $30 million per year, a tiny fraction of the overall cost of the benefits. But it would have symbolic value to lawmakers.

"Allowing individuals who earned more than $1 million last year to collect unemployment benefits is indefensible," Sen. Tom Coburn (R-Okla.), the leading proponent of banning millionaires from unemployment insurance, said in 2011. "This is a common sense, bipartisan spending cut."

Asked if Coburn would support Reed's bill, a spokesman said simply that the Oklahoma Republican believes the best unemployment insurance program is a job.

Reed acknowledged that three months isn't a very long time.

“I know this is just a short-term solution," he said. "I support a long-term solution and will continue to press for that. But even if we can help get people through to spring, when construction activity picks up and more jobs become available, it will provide a lift to our economy."