Congress voted today and passed the proposed payroll tax holiday that will affect approximately 160 million workers and their paychecks to the tune of about $80 a month for someone earning $50,000 a year.
In December, the Republicans worked to extend the payroll tax holiday for all of 2012. They argued back and forth across the aisle and in the end, both the House and the Senate settled for a two-month extension. At the end of this month, that tax cut will end unless Congress votes to extend it for the rest of the year and that vote comes up today. The $143 billion package includes not only the tax cuts, but unemployment coverage, and higher reimbursements for doctors who treat Medicare patients.
Pundits expect it to sail through the House and likely in the Senate, however, some have concerns that there may be last-minute defections. Some Democrats want to pass it purely for political reasons. They want to give Barack Obama something to run on with for his bid for re-election. Other dems see it as something positive for themselves to run on since all of the House comes up for re-election again this year. However, others object because the bill makes cuts in civil service benefits and health programs or because they claim it puts Social Security in jeopardy. Sen. Tom Harkin (D-Iowa) said, “It’s a devil’s deal,” he later added. “It’s a bad deal. There are better ways to accomplish these goals.”
On the other side of the aisle, many Republicans oppose the bill because it has no provision to pay for the cuts and adds $89 billion to federal deficits over the coming decade. At the same time, others will lend their support so that, according to Freshman Representative Tom Reed (R-NY), "It will allow us to move forward on our agenda in the House."
For his part, yesterday Obama praised both parties for coming to some kind of agreement. “There's much more the American people need and expect from us -- to help our businesses keep creating jobs, to help restore security for middle class families and to leave an economy that's built to last."
Representative Jeff Flake (AZ-R) said, “Why is it that the only time we can come together and reach an agreement, it’s in a manner that increases the deficit or explodes spending?” Then he added, “That’s enough to make the country cry for more partisanship.”
Senator Chuck Schumer (D-NY) said of GOP lawmakers, "They've learned that it's politically stupid" to oppose the measure.
Leadership in both houses must feel they have enough support to pass the measure or they wouldn’t bring it to a vote. In the Senate, though, they expect to need more than 10 Republicans to reach the 60 votes need to pass it.
The GOP did win one point, a reduction in coverage for long-term unemployment. That number dropped from a maximum of 99 weeks to 73 weeks by this fall in states with the worst job markets, including states where that ceiling now stands at 63 weeks. Congress plans to pay for that extended coverage, about $30 billion worth, with government sales of parts of the nation's broadcast airwaves and by requiring federal workers hired after this year to contribute an additional 2.3 percent of their pay for their pensions, up from the current 0.8 percent. The increase also applies to members of Congress, but only those who begin service as of next January, thus exempting every current lawmaker.
The bill also prevents a 27 percent cut in federal payments to doctors who treat Medicare patients, a reduction that threatened to make it harder for seniors to find physicians. That would cost about $18 billion. In addition, a House-approved measure lets states test unemployment benefit applicants for drug testing for people who lost their jobs due to drug use or whose new jobs would require such tests.
In the end, after all the negotiating, the House passed the bill this morning with a vote of 293 - 132, and it passed the Senate by a vote or 60 - 36. The bill will now go the president's desk to await his signature. He has already indicated he will sign it.
Image source of US Congress debating Payroll Tax: http://www.house.gov/
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