Does UI Extension Require Compliance with PAYGO? Would that it were easy to answer this one. As you might imagine, the answer is: it depends. PRO: PAYGO applies to an extension of unemployment insurance (UI) benefits because there would be -- without an offset -- a net increase of the deficit at the end of the day. Like other trust funds (think Social Security), there is no actual money there, just IOUs.

Taxes -- House Vote on Unemployment Benefit Extension: The House is expected to vote later this week on H.R. 4934, a bill to extend unemployment insurance for workers who have exhausted their benefits by up to 13 weeks in every state as well as an additional 13 weeks in states with higher levels of unemployment. The bill's language defines "higher levels" as a seasonally adjusted 6 percent total unemployment rate or a 4 percent insured unemployment rate. The bill is expected to cost about $14 billion, and the funding levels are not offset in the bill, raising possible "pay-go" concerns.

Economy -- Gas Prices Hit National Average of $4: Gasoline prices reached a national average of $4 a gallon for the first time over the weekend, adding more strain to the economy. "This crisis really impacts those who are at the economic margins of society, mostly in the rural areas and particularly parts of the Southeast," said Fred Rozell, retail pricing director at the Oil Price Information Service. Gas prices have risen a dollar a gallon since January 1. NY Times.

Unemployment -- Monthly Rate Jump Highest Since Feb. 1986: The Bureau of Labor Statistics reported this morning that the nation's unemployment rate rose a half of a percent, from 5.0 in April to 5.5 percent in May, the fastest rise in 22 years, as 861,000 joined the ranks of the unemployed. Meanwhile, those with jobs have seen their real wages shrink this past year: hourly earnings have risen 3.5 percent, below the pace of inflation, which is running at about 4 percent. NY Times.