2012-02-15 / World

Lawmakers digest deal on payroll tax cut

WASHINGTON (AP) — Congressional leaders are gauging lawmakers’ reactions toatentativedealextendinga2percentage point payroll tax cut and extra jobless benefits through 2012, a pact bargainers reached after House Republicans conceded that the tax cut would not have to be paid for with spending cuts.

Both sides cautioned late Tuesday that the agreement was not final and still could be altered. If completed, final congressional approval was possible by Friday, which would be an election-year victory for President Barack Obama, who made the payroll tax cut a keystone of his largely ignored jobs creation plan in September.

House Republicans emerging from a closed-door meeting said reaction to the package was generally positive, with some saying it reflected a desire to avoid spending months debating an issue that cost them dearly last year. In December, the House GOP initially opposed a twomonth extension of the tax cut and other benefits that were about to lapse, only to retreat under pressure from outside party leaders and conservatives.

“ We’ve got to move onto another issue,” said Rep. Dennis Ross, R-Fla. “I think that’s what the mood is.”

“I’d say most people are for it, at least accepting it,” said Rep. Peter King, RN. Y.

Republicans were determined that Obama not be able to claim that the GOP was standing in the way of a middleclass tax cut. They would rather spend the months leading up to the November presidential and congressional elections focused on GOP themes of opposing tax increases, higher spending and Obama administration regulations that they say stifle job creation.

The tentative compromise would extend through December the current 2 percentage-point cut in the usual 6.2 percent Social Security payroll tax deducted from workers’ paychecks. That reduction, which saves $1,000 a year for families earning $50,000, would affect 160 million workers and would otherwise expire on March 1.

It would also prevent extra unemployment benefits for the long-term jobless from expiring March 1 and block a 27 percent cut in reimbursements for doctors who treat Medicare patients. Overall, the legislation would cost roughly $150 billion.

On Monday, House Republicans dropped their demand that the payroll tax cut — totaling roughly two-thirds of the bill — be paid for. The hunt for savings had been one of the chief hurdles in weeks of negotiation over the legislation.

Also excluded, aides said, was a collection of expiring tax breaks, largely for businesses buying equipment and other corporate expenses that had been sought by some lawmakers of both parties.

Participants said the Medicare payments to doctors would be paid for by reducing Medicare reimbursements to hospitals and by cutting in half an $8 billion program under Obama’s health care overhaul aimed at battling obesity and smoking.

The unemployment benefits would be financed with a collection of savings that include government sales of parts of the broadcast airwaves to wireless companies and from boosting federal workers’ contributions to their pensions.

Democrats were saying little publicly, and House Democrats planned to meet today to discuss the tentative plan.

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