CQ TODAY ONLINE NEWS
Feb. 16, 2012 – 11:11 p.m.
Payroll Tax Deal Heads to Floors
By Ben Weyl, CQ Staff
The House and Senate are expected to pass legislation as early as Friday to extend a payroll tax cut through the end of the year, in a victory for President Obama as well as a Congress hungry for a bipartisan achievement absent another messy showdown.
The House will vote first, followed closely by the Senate, barring procedural objections, on a conference report to legislation (
Obama praised the deal, calling it “the right thing for our families and for our economy,” and urged Congress to send the bill to him for his promised signature.
The votes will cap months of partisan brinkmanship over whether and how to continue the programs, even as tensions persisted to the very end. Negotiators did not announce an agreement until early Thursday morning, but uncertainty hung over the remainder of the day before negotiators signed off on and released the agreement.
In what may be a preview of the upcoming floor votes, the agreement won the signatures of most of the Democratic negotiators but exposed divisions between House and Senate Republicans. Still, members of both parties expressed confidence the House and Senate would adopt the conference report and avert a politically perilous lapse of both the tax cut enjoyed by some 160 million American workers and the other popular programs.
Trying to Avoid Repeat of Past
The conference committee was established after Congress cleared a two-month extension (PL 112-78) of the tax cut and other expiring programs last December. The skirmish left House Republicans bloodied after they initially rejected the compromise short-term extension fashioned by Senate Democratic and Republican leaders.
With the economy still fragile and lawmakers stung by attacks by Obama against a “do nothing” Congress, keeping the programs running has been a top priority. Conferees arranged a celebratory ceremony, inviting news cameras to capture negotiators signing the deal, but, in keeping with the difficulties that have marked the legislation, the event ended before a majority of signatures had been collected. Aides hunted down the final signature, that of Sen.
Continuation of the reduced Social Security payroll tax paid by employees is expected to bring each worker an average of $1,000 a year. The long-term jobless benefits would be renewed into next January, although they would be scaled back in three stages. The current Medicare reimbursement rate for physicians would be preserved for the next 10 months, blocking a scheduled 27.4 percent payment cut.
Though both parties began the year pledging to continue the programs, sharp disagreement focused on how to offset the cost. In the end, that was largely solved by House GOP leaders’ decision to reverse course and forgo paying for the tax cut, a roughly $100 billion cost. The remaining $50 billion is offset by cuts in health care spending, including to a preventive health fund created by the 2010 health care law (PL 110-148, PL 110-152), and by a provision to require new federal employees to contribute more to their retirement accounts. Additional revenue will be raised by auctioning blocks of electromagnetic spectrum used by television broadcasters.
The conference committee report drew praise and criticism from lawmakers on both sides of the aisle. Democrats long resisted targeting the health care overhaul and federal employee pensions to pay for the measure. Many rank-and-file Republicans remain displeased with the decision to not offset the cost of the tax cut.
In a victory for Republicans, the deal calls for scaling back long-term jobless assistance paid by the federal government, although Democrats say they spared the neediest, because benefits will hinge on the unemployment rate of each state.
Under the agreement, states will be able to require drug screening of unemployment recipients who lost a job because of a failed drug test or who are searching for a job that requires drug testing, provisions similar to what Republicans had sought. But they lost a fight to require people receiving jobless benefits to be pursuing the equivalent of a high school degree.
Payroll Tax Deal Heads to Floors
Democrats also cast aside attempts to relax federal regulations on industrial boilers, and there is no mention of the Keystone XL Pipeline, a GOP priority, which were included in the version that the House passed Dec. 13 as well as in the short-term version the Senate passed four days later.
Though conservatives and liberals each harbor disappointments, it does not appear that the misgivings are strong enough to endanger passage in either chamber.
House Speaker
“There will be a very strong vote in the end,” said Rep.
“I think at the end of the day, we’ll have enough to get it done,” added New York Republican Rep.
Minority Leader
“It is far from perfect, but it does maintain vital benefits for those who have lost their jobs through no fault of their own,” said Rep.
One prominent Democrat who will vote against the measure is House Minority Whip
“This proposal is an unacceptable solution,” Hoyer said. “We must stop targeting these hard-working men and women while not asking others to contribute their fair share.”
Senate Majority Leader
Reid is not ruling out having to deal with objections to expediting votes, something that could delay a cloture vote until early Feb. 19 and a vote on final passage until Feb. 20. “It’s possible we would have to have some of the votes later in the week,” he said.
Majority Whip
Senate GOP Concerns?
Payroll Tax Deal Heads to Floors
Perhaps the biggest remaining question is how many Senate Republicans will support the deal, although a Senate GOP aide said there would be enough to reach the necessary 60 votes. At least one Senate Republican has already announced he would vote for the measure —
Still, none of the three Senate Republican conferees signed the conference report, suggesting a possible GOP rift.
Minority Whip
Kyl seemed to adopt a wait-and-see attitude shared by a number of Senate Republicans who have expressed doubts about whether the agreement will clear the House.
“We’ll see if the House passes it,” Kyl said. “And then I’ll deal with it.”
However, Senate Finance Chairman
Alan K. Ota and Joseph J. Schatz contributed to this story.