updated 11/12/2010 3:36:35 PM ET 2010-11-12T20:36:35

New York is preparing for the possibility that an extra 190,000 residents could lose emergency unemployment insurance benefits at year's end if Congress fails to act next week, state Labor Commissioner Colleen Gardner said Friday.

"This is no time to cut off benefits," Gardner said. "We still have a job market where there's only one job opening for every five people looking for work.

"We estimate that for every dollar invested in unemployment insurance benefits, close to $2 is spent in every local economy," she added in a conference call with reporters. "That's especially important between now and the end of the year as the holiday time approaches."

More than 100,000 New Yorkers already have exhausted their emergency benefits. Some 30 percent of those have tapped public assistance, typically food stamps and sometimes the Medicaid health care program for the poor, Gardner said.

An additional 190,000 state residents could lose out by Jan. 1 or around 400,000 by May 1, she said.

Republicans in Congress want spending cuts of $5 billion to $6 billion a month as a condition for extending emergency benefits scheduled to expire in December. Up to 2 million people could lose the benefits if the Democratic-controlled Congress doesn't act in the postelection lame-duck session.

Jobless people are eligible for up to 99 weeks of benefits in most states. The first 26 weeks are paid by states. About 3.7 million draw them now.

Democrats argue that the extended benefits should be paid for with deficit spending because it injects money into the economy. Jobless people immediately spend the cash, they explain. But Republicans note that the government had to borrow 37 cents of every dollar it spent last year, and it's time to draw the line.

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