WASHINGTON - The Senate vote unanimously on Wednesday to extend aid for jobless workers and broaden tax breaks for homebuyers and businesses in a bid to breathe life into the struggling U.S. economy.

After weeks of partisan bickering, the Senate passed the bill by a vote of 98 to 0. The House of Representatives is expected to vote on it as soon as Thursday 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 federal budget deficits.

Instead, they have opted for a smaller package that broadens several existing measures without adding to the deficit.

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.

The homebuyer credit will not be extended beyond April 30, said the measure's sponsor, Republican Senator Johnny Isakson.

Another provision of the bill would allow businesses to get a break on their tax bills by applying losses from 2008 or 2009 to recover taxes paid in prior years when the economy was booming. This expands a tax break that currently only applies to small businesses.

Business groups say the change would give cash-strapped companies immediate access to capital, but consumer groups have criticized it as corporate welfare.

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 lopsided vote did not reflect the partisan bickering that had held up the bill for weeks while lawmakers sparred over unrelated provisions, such as 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 on the bill. The Republicans have become experts in wasting time, he said.

Republicans countered that the Senate could have approved the bill weeks ago had Reid allowed a vote on their proposals.

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, Simon Denyer and Jackie Frank)