House, Senate negotiators reach deal on payroll tax break
Comments (...)WASHINGTON (MCT) — Despite discomfort in the Republican ranks, House and Senate negotiators reached a deal in principle early Thursday to extend a payroll tax break, continue unemployment benefits and ensure that Medicare doctors do not get a pay cut this year.
As talks Wednesday night continued past midnight — the ostensible deadline — at one point a source with knowledge of the private session confirmed that a deal had been reached. But about an hour later, the source cautioned that some details remained to be worked out. The chief negotiators, Democratic Sen. Max Baucus of Montana and Republican Rep. Dave Camp of Michigan, remained holed up in the Capitol.
Finally, at nearly 1 a.m., they emerged, saying they had a deal in principle and the final language should be ready in the morning.
Generally under House rules, a proposal should have been made public by midnight so it would be available for lawmakers to study three days before the vote.
Congressional leaders hope that both chambers can vote on the package by week’s end — before lawmakers adjourn for a weeklong recess. They are scheduled to return Feb. 27 — days before the tax cut expires.
Without action, taxes would rise March 1, long-term unemployment benefits would end, and doctors’ pay would be slashed by 27.4 percent — politically toxic outcomes all sides hope to avoid.
The stalemate arose in December, when “tea party”-linked House Republicans rejected extending the payroll tax, which trims 2 percentage points from workers’ Social Security taxes. Under withering public criticism and Congress’ collapsing poll numbers, they agreed to extend it through this month.
Several Republicans said earlier Wednesday that although they disapproved of the emerging compromise, they were reluctant to keep fighting. President Barack Obama has continued to portray Republicans as blocking a tax break for 160 million working Americans.
“One thing we know: December was a debacle,” said Sen. John McCain, R-Ariz. “We don’t want to repeat that.”
Rank-and-file Republicans have found little to like in the package since GOP leaders announced earlier in the week that they would drop their insistence that the tax cuts be paid for by spending reductions elsewhere.
GOP leaders said they had little choice but to drop their demand after Democrats showed little willingness to make the spending cuts Republicans wanted.
Republican Rep. Pete Sessions of Texas, who as chairman of the party’s campaign committee is working to keep the House GOP majority this fall, said he still thinks the payroll tax break is “a bad idea.” But he found value in resolving the issue.
“I think at some point the American people are looking to us to find a way to move on, move together,” Sessions said.
The deal would extend the payroll tax break through the rest of the year.
The $100 billion cost of the tax cut would not be paid for with Republican-supported spending cuts, nor with higher taxes on the wealthy, as Democrats had wanted. Instead, the lost revenue for the Social Security fund would be replaced from the general fund, essentially adding to the deficit.
The other provisions in the package would be offset with a combination of new revenues and spending cuts.
The estimated $30 billion needed to continue long-term unemployment benefits would be covered partly by new revenues from auctioning off bandwidth in the federal communication spectrum, which wireless providers want to expand their services.
The remainder would come from a reduction in the government’s contribution to federal workers’ retirement accounts. Workers would be asked to contribute an additional 0.75 percent toward their retirement, phasing up their current contribution of 0.8 percent to 1.75 percent over the next several years, according to aides familiar with the package.
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