The new JOBS Act moving through the House has conservatives saying the nation is on the verge of fixing its broken unemployment insurance system, but Congressional Democrats and their supporters are fighting back.

At issue is a Republican-sponsored bill that would allow states to reduce or eliminate the 73 weeks worth of federally funded extended unemployment benefits now available to people who exhaust the initial 26 weeks of unemployment checks states provide.

With the extended unemployment benefits set to expire at the beginning of 2012, the bill would allow states to use the federal unemployment money for the rest of 2011 to cover the 26 weeks of state-funded unemployment benefits, repay federal loans to states for unemployment payments, or create re-employment services or establish wage subsidies.

“In my home state of Michigan, we are perilously close to three straight years of unemployment rates in the double-digits,” said Rep. Dave Camp (R-Mich.), one of the bill’s sponsors, in a statement. “When the JOBS Act is signed into law, states like Michigan will have new flexibility to make changes that better meet the need of their constituents within the bounds of the unemployment benefits system.”

Camp, along with Rep. Geoff Davis (R.-Ky.), and Rep. Rick Berg (R-N.D.), sponsored the legislation, which passed through the House Ways and Means Committee by a vote of 20-14. The bill now faces a full vote on the House floor.

According to Camp, the act is meant to provide states with new flexibility in how they choose to spend federal unemployment funds, prevents tax increases on employers and sets standards that those receiving benefits must be actively searching for employment or pursuing education.

However, those who oppose the bill call it the “No Jobs” Act, saying they don’t believe it will create jobs at all. Rep. Donna Edwards (D.-Md.), told the AFRO in an e-mail that this bill would eliminate unemployment insurance instead.

“It is shameful that Republicans have not offered a single piece of legislation to create jobs and instead want to eliminate unemployment insurance for 4.1 million Americans while defending tax breaks for millionaires and big oil companies,” Edwards said. “At a time when the unemployment rate for African-Americans remains stubbornly high, families need this effective stimulus to buy groceries, fill gas tanks, and pay utility bills.”

The National Employment Law Project plans to join Edwards in lobbying against this bill. The group believes that if the measure is passed, states will use the funds in lieu of collecting taxes on businesses to fund unemployment payments–a possibility the project’s executive director Christine Owens said is unthinkable.

“There are ways to meet the goals of maintaining benefits for the long-term unemployed, promoting job creation, and easing burdens on states and employers—but this bill does none of that,” Owens said in a statement. “Instead, it sets the stage to reward states for years of bad UI funding policies and corporations for relentless lobbying to cut UI contributions, all at the expense of the long-term unemployed—and without creating any jobs.”