By Sue Kirchhoff, Globe Staff, 12/25/2002

Since losing her job in March as an office manager for a small firm that manufactures sheet-metal products, Mary M. Guiod of South Boston has entered a retraining program, sent out resumes, answered want ads, and, in desperation, put her house on the market. ''I'm scared, I'm going to be honest with you, at my age,'' said Guiod, 53. ''There's nothing but more layoffs, more layoffs.''

Guiod, who has already run through her state unemployment checks, qualified for a special federal unemployment program designed to provide as much as 13 weeks of extra benefits. But she is one of nearly 800,000 people - 25,000 of them in Massachusetts - who will lose their benefits when the program expires Saturday, a victim, at least temporarily, of partisan bickering on Capitol Hill.

''I can't believe my life could go downhill so badly. I don't know what to do after the 28th,'' Guiod said. ''I really don't know.''

The White House and congressional leaders are on the defensive, plotting strategy to restore aid quickly to the laid-off workers who will lose their benefits in the midst of the holiday season. The checks are running out for one simple reason: Congress was unable to reach agreement to extend unemployment assistance before adjourning for the year on Nov. 23.

President Bush, who declined to press the issue last month, is now insisting that lawmakers pass a legislative fix soon after Congress reconvenes on Jan. 7. Republicans - even while protesting that Democrats have exaggerated the extent of the problems - are developing a more generous bill than they had previously been willing to embrace.

House Republicans want to continue federal benefits for people who have already qualified for the extended aid; they also propose up to nine weeks of aid for those who have lost their jobs more recently, after they exhaust regular benefits in many states. They would transfer $5 billion to the states and give businesses a one-year break from the Federal Unemployment Tax Act. The federal tax break would come as states like Massachusetts, which cut their business unemployment insurance tax during the 1990s, consider major increases to ensure their state trust funds remain solvent.

House Democrats have their own plan to provide an extra 26 weeks of federal benefits for everyone who runs through state unemployment aid, plus an extra seven weeks in high unemployment states.

But beyond the short-term fix, Democrats such as Senator Edward M. Kennedy of Massachusetts want to update unemployment eligibility rules. Government reports have found that low-wage earners are far less likely to collect benefits than their higher-wage counterparts, even though they are much more likely to be unemployed. Also, only about a third of workers applied for unemployment assistance during the 1990s, for example, compared to more than 50 percent in the 1950s.

In the meantime, people such as Sandra Phillips of Fitchburg are trying to figure out how to scrape by just a bit longer. The 36-year-old nurse's aide has already run through her state unemployment checks and, two weeks ago, qualified for a special federal unemployment program designed to provide as much as 13 weeks of extra benefits. That's the program that's set to expire on Saturday.

''I'm a single mom with three children, so every paycheck means something,'' Phillips said. ''December is a very difficult time to get a job. It's been very difficult all along, but, particularly in December, people say `come back in January.'''

Phillips has been looking for a full-time job since this spring, when business dried up at the temporary employment agency where she had been for nearly eight years. Her father and two sisters have also been laid off in recent months, leaving her with few places to turn when the $489 weekly federal checks end.

Her situation is hardly unique. While the national unemployment rate has fluctuated between 5.5 and 6.0 percent since January, the number of long-term unemployed, those out of work for six months or longer, has climbed from about 14 percent of the jobless to nearly 21 percent, according to the US Labor Department. More than 1.7 million people had been out of work 26 weeks or more in November, the highest level in eight years.

In addition, the percentage of people using up regular state benefits without finding work has reached record levels, according to the Center on Budget and Policy Priorities, a nonpartisan think tank. Nearly 50 percent of people who started receiving unemployment checks in March exhausted their benefits in October without having a new job in sight. About 1 million people have run through their extended federal benefits - and an estimated 95,000 people a week will exhaust state benefits, but be ineligible for the extra federal aid after the 28th.

Republicans, who will control Congress next year, complain that Democrats and liberal advocacy groups have overstated the unemployment picture to score political points. In a document entitled ''Debunking Liberal Myths on the Unemployment Picture,'' the House Ways and Means Committee staff argues that there are 1.5 million fewer unemployed people now than during the 1990s recession, and that the average duration of unemployment was higher in 1994 when the then Democratic-led Congress voted to cut off extended unemployment benefits. Other skeptics of extending benefits point out that November's 6 percent national unemployment rate was low by historic standards.

Adding to the debate, many economists argue that extending unemployment benefits is one of the most effective ways for the federal government to pump additional money into the lackluster economy.

''It is unconscionable to leave these families out in the cold because the Republican leadership in the House stubbornly refused to accept legislation that had unanimously passed the Senate to provide another extension to unemployed workers,'' Kennedy said.

The cutoff of unemployment benefits is part of a bigger trend that is leaving Americans with fewer options in economic hard times. Faced with budget crises, states are cutting back on Medicaid health insurance for low-income families. Federal and state job training programs, with some exceptions, are being pared down. Welfare programs have become far more restrictive than in the early 1990s, while federal food stamp benefits have been cut back.

Most states offer 26 weeks of unemployment aid, though Massachusetts has allowed up to 30. The federal government has a separate program offering extra aid in periods of high unemployment. The federal guidelines are so restrictive, however, that few states qualify. During the previous Bush administration, Congress and the White House stepped in five times to pass special unemployment packages.

Congress this spring approved a new temporary program offering up to 13 weeks of federal benefits to everyone who exhausted state benefits. It also offered a second 13-week chunk of federal aid in high unemployment states. The federal aid was slated to end on Dec. 28 on the assumption the job market would rebound. Instead, the country is working its way through a jobless recovery as companies lay off workers or try to squeeze more work out of existing staff.

In his Dec. 14 radio address, Bush called on Congress to make a new unemployment extension the first order of business when it reconvenes in January, including a demand that any bill be retroactive. Senate Republicans during a strategy session this week promised to follow through.

''We talked a lot about what we need to do to help get this economy going. We talked about unemployment insurance, and that has to be one of our first orders of business out of the box,'' said Senator Rick Santorum, Republican of Pennsylvania.

The Massachusetts Division of Employment and Training has announced it will continue accepting applications for extended benefits even after the program ends on Saturday in hopes of getting people quickly back on to the rolls when and if Congress acts. The unemployment rate in Massachusetts dropped slightly to 5 percent in November, from 5.3 percent the previous month. State officials suggested the decline might be due to the fact that some people had stopped looking for work, rather than a brightening job market.

-- Anonymous, December 25, 2002