By: David Rogers

House and Senate Democratic leaders signaled Thursday that they are prepared to bring Congress back in December given the continued economic turmoil and failure to reach agreement on aid to the auto industry.

House Speaker Nancy Pelosi (D-Calif.) met with Senate Majority Leader Harry Reid (D-Nev.) Thursday, and officials said later that the new plan would make it possible for the two chambers to be back in session Dec. 8.

The agreement came as a bipartisan group of Midwestern senators announced they had reached agreement on their $25 billion alternative loan package for Detroit’s Big Three automakers. But Pelosi is strongly opposed to the source of funding. And by calling the House back in December, she gives herself more time to respond and press for other options.

The break will also give the industry some time to rethink its own strategy. Auto CEOs hurt themselves politically this week in their handling of questions before Congress, and Democrats argue that they must come up with more of a salable plan to be assured of political support.

The leadership’s decision came hours after the Labor Department reported that new claims filed for unemployment insurance soared to 542,000, the highest since the summer of 1992, when the nation was recovering from a recession. At the same time, the number of people continuing to draw jobless benefits climbed to more than 4 million, the highest in more than 25 years.

The grim numbers follow new projections by the Federal Reserve this week indicating that unemployment will not only deepen but significantly hang over the economy through 2010. And given the seriousness of the situation, the failure of Congress and the White House to work better together during the post-election session this week has been a growing embarrassment.

The one bit of agreement thus far is the prospect that lawmakers will act this week on legislation authorizing between seven and 13 weeks of extended unemployment payments for workers who have exhausted their jobless benefits. The bill — which has already passed the House — is pending in the Senate, and the White House gave its blessing Thursday.

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