Sides seek compromise after vote on jobless benefits

Having defeated Gov. Timothy M. Kaine on expanded jobless pay for thousands thrown out of work by the steep recession, Virginia's business lobby now is signaling a willingness to consider compromise on the politically volatile issue.

"Everybody on our side certainly is more agreeable to revisiting this when we have more time to understand it and more time to debate it," said Keith D. Cheatham, a lobbyist for the Virginia Chamber of Commerce.

Late Wednesday night, Kaine suggested that the battle to secure the money may not be over when he sharply criticized the business-friendly, Republican-controlled House of Delegates for failing to support legislation that would have brought in an additional $125.5 million in unemployment assistance.

"I think in this instance we made a huge mistake. Fortunately, it is one that can be corrected -- and I hope it will be," the governor said.

"I'm not going to leave Virginia workers stranded. I've got nine more months as governor, and we're going to try to figure out what to do."

Kaine suggested a fix could be a combination of executive, administrative or "other legislative strategies" but stopped short of saying he would call a special session of the legislature to revisit the issue.

Yesterday, Kaine made a long-scheduled visit to Martinsville, a former textile and furniture center wrestling with a 20.2 percent unemployment rate.

The governor reiterated his disappointment with the General Assembly's vote, noting that it was the only portion of Virginia's $4.8 billion share of the recovery package that Republicans chose to block. The additional money is intended to provide first-ever benefits for unemployed part-time workers and those not working but training for other positions.

Kaine spokeswoman Lynda Tran said the governor believes the situation is urgent and is focused on finding solutions that will help Virginians "sooner rather than later."

With the federal cash available to Virginia until 2011, lobbyists on both sides said lawmakers could take up the measure when the legislature returns in January, or sooner.

"Whatever legislative vehicle is available to us -- be it a special session or regular session next year -- we should take advantage of it," said Michael J. Cassidy, executive director of the Commonwealth Institute, an economic think tank that backed the Kaine initiative.

Sen. John Watkins, R-Powhatan, one of the General Assembly's experts on unemployment benefits and an opponent of the Kaine plan, urged a meeting of "the stakeholders . . . [to] figure out a way to get this done."

Failing to find a compromise could have political consequences in a critical election year, as the recession deepens and Kaine, who also is chairman of the Democratic National Committee, focuses on keeping Virginia in his party's column.

This fall, Virginians will elect a governor, a lieutenant governor and attorney general. Democrats narrowly hold the Senate, hope to hold the goverNorship, and perhaps win back the House, where all 100 seats are up for election.

In an apparent acknowledgement of political fallout from their resistance to additional benefits, some Republican candidates softened their stance.

Lt. Gov. Bill Bolling put some distance between himself and the GOP's presumed nominee for governor, former Attorney General Bob McDonnell, who favored rejecting the jobless money.

"We remain hopeful that some compromise may be possible, and we are more than willing to work with Governor Kaine and legislative leaders to try and find that compromise," Bolling spokesman Randy Marcus said.

Contact Jeff E. Schapiro at (804) 649-6814 or .

Contact Jim Nolan at (804) 649-6061 or .

Staff writer Olympia Meola contributed to this report.