Thousands of Americans are set to begin losing unemployment benefits after Congress failed to agree on extending aid to the long-term unemployed, Bloomberg reported.

In a replay of a dispute earlier this year, lawmakers are deadlocked over how to finance an extension even as the aid starts to lapse. Democrats yesterday offered to extend benefits for a year, with the $56 billion cost financed with borrowed money.

About 8,400 Americans will see their unemployment benefits cut off by the end of this week, according to the U.S. Department of Labor. By the end of the third week of December, aid to 1.36 million Americans will be interrupted, the agency said. The program had enabled individuals to extend their unemployment benefits for up to 47 additional weeks.

In Iowa, approximately 2,000 unemployed workers will lose their benefits each week over the next several months without the extension, Iowa Workforce Development Director Elisabeth Buck said in a press release.

“While the Iowa economy is showing signs of improvement, there are thousands of individuals still in need of (extended) benefits,” Buck said.

Some Democrats, including Sen. Dick Durbin of Illinois, said an extension of unemployment aid should be included as part of any deal to extend tax cuts enacted during the administration of President George W. Bush.

President Barack Obama and many other Democrats want to retain tax cuts passed in 2001 and 2003 only on the first $200,000 annually earned by individuals and the first $250,000 earned by married couples filing jointly. Republicans want tax cuts extended permanently for all income levels, saying that allowing any taxes to rise during a fragile economic recovery is a bad idea.