WASHINGTON - The U.S. Senate was poised on Wednesday to extend aid for jobless workers and broaden tax breaks for homebuyers and businesses in a bill aimed at breathing life into the U.S. economy.

After weeks of partisan bickering, the Senate was set to hold a final procedural vote, clearing the way for final passage on Wednesday or Thursday. The House of Representatives is expected to approve it quickly and send it to President Barack Obama to sign into law.

Democrats who control Congress are under pressure to get the economy moving before the November 2010 congressional elections. But they have been reluctant to assemble another massive stimulus package after February's $787 billion measure, fearing a voter backlash over record budget deficits.

Instead, they have opted for a smaller, budget-neutral package that broadens several existing measures.

The bill would give an additional 14 weeks of unemployment benefits to jobless workers. Those in high-unemployment states would get six weeks on top of that.

Unemployment insurance payments, which average $308 per week, usually expire after six months but Congress has already extended them twice in a recession that has been marked by a high number of long-term unemployed.

Economists say the payments stimulate the economy because they are spent quickly and help the jobless avert foreclosure and bankruptcy.

Unemployment stands at 9.8 percent, the highest since 1983, and analysts expect it to climb to 9.9 percent when new figures for October are released on Friday.

The rate is expected to rise into next year, even if the economy climbs out of the deepest recession in decades.


The bill also extends an $8,000 tax credit for first-time homebuyers which has helped the housing industry recover from the foreclosure crisis, though some analysts say it has largely gone to people who would have bought houses anyway.

The credit, which is due to expire on November 30, would be extended until April 30 and expanded to include more affluent homebuyers. People who have owned a home for at least five years would also be eligible for a $6,500 credit if they move.

Businesses would be able to apply losses from 2008 or 2009 to prior years when the economy was booming.

The additional unemployment benefits would be paid for by extending a tax on employers. The housing and business tax breaks, which would cost the government $21.2 billion over 10 years, would be financed by delaying a rule change that governs how companies allocate interest expenses.

The bill has been held up for weeks as lawmakers sparred over unrelated provisions that Republicans wanted to bring up for a vote, such ending the unpopular bank-bailout program.

Senate Majority Leader Harry Reid said some 600,000 jobless workers have used up their unemployment benefits while Republicans blocked action. The Republicans have become experts in wasting time, he said.

Republicans countered that the Senate could have voted weeks ago had Reid allowed their amendments to be voted on.

In a good long day we could have brought all those amendments up and voted on them, Republican Senator Mike Johanns said on Monday.

(Editing by Alan Elsner and Simon Denyer)