UPDATE:Senate Votes To Approve Federal Jobless Benefits Extension

The centerpiece of the legislation is a move to continue federal jobless benefits for 14 weeks for unemployed Americans in all 50 states, and for 20 weeks in states with jobless rates higher than a three-month average of 8.5%.

The national unemployment rate reached a 26-year high of 9.8% in September, and economists expect it to climb further when the Department of Labor reports October figures Friday.

Lawmakers in the House have to take up the legislation before it makes its way to the White House for President Barack Obama's signature.

Leaders there have pledged to do so, possibly as soon as the end of the week.

The White House has said it supports the legislation.

Despite the final Senate vote, passing the bill wasn't easy. A month-long dispute between Democrats and Republicans held up progress of the measure before the legislation was approved by lawmakers Wednesday evening.

At times, the arguments in the Senate appeared arcane when compared to the daily reports of thousands of people across the U.S. exhausting their unemployment benefits.

"Seven thousand people a day were losing their unemployment insurance while we dithered up here trying to decide if we were going to have a vote on this matter," Sen. Christopher Dodd (D., Conn.) said at a press conference after the vote.

Over the more than four-week hold up, lawmakers argued about several measures, few of them directly related to the legislation before them.

Some Republicans wanted a vote on enhancing a program in which employers use a security software to ensure potential employees are legal residents.

Others wanted to attach a measure forcing the Treasury to wind-down its financial market rescue program by the end of the year.

They fought over whether a vote would be allowed on ensuring the controversial group Association of Community Organizations for Reform Now is cut off from receiving federal funding.

Sen. Mike Johanns (R., Neb.) pushed for a vote on using unused money from the $787 billion economic stimulus plan to pay for the benefits extension, rather than continuing a payroll tax on employers that had been set to expire by the end of the year.

In the end, none of these votes occurred.

Both Democrats and Republicans attempted to portray the other side as being more concerned with Senate procedure and ignoring the harsh economic realities people are facing around the country.

The extension of benefits means people living in the worst-affected parts of the country can receive 53 weeks of federal assistance. States vary in how many weeks they provide over that.

The bill also continues an $8,000 first-time home buyers' tax credit on all house contracts entered into before April 30, and closed by June 30. It creates a new $6,500 credit for existing property owners looking to sell their home and buy another during the same period of time.

Both credits have income restrictions limiting their availability.

Businesses will be able to write off the losses they booked in 2008 or expect to do so in 2009 against federal income taxes paid on profits earned in the previous five years. The economic stimulus plan enacted in February had created the tax credit, but restricted it to smaller firms.

It will also allow smaller investors who lost money in the Bernard Madoff scandal to claim a portion of their losses against taxes paid in earlier years.

-By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com

  (END) Dow Jones Newswires
  11-04-091856ET
  Copyright (c) 2009 Dow Jones & Company, Inc.