Congress set to pass payroll tax cut, unemployment benefits

CBS/AP

The House and Senate are set to act on a deal that extends the payroll tax holiday and unemployment insurance as early as tomorrow. Congressional negotiators signed off on the $150 billion package today that would extend the program and tax cut through the end of the year.

The deal also tackles other pending issues in need of resolution: It prevents doctors who treat seniors on Medicare from seeing a nearly 30 percent pay cut from the federal government at the end of this month.

"At the end of the day, we're ahead of our deadline and we got something done in a bipartisan-bicameral way" said negotiator Rep. Greg Walden (R-OR) on his way into an ornate room off the House floor to officially sign the agreement.

The leaders of the conference committee, Rep. Dave Camp (R-MI) and Sen. Max Baucus (D-MT), smiled broadly and even joined hands and raised them in the air as if they'd just won a boxing match as they watched members come to sign off on the agreement.

Sen. Max Baucus said, nearly shouting, "Working together!" which is something that the two lawmakers have had little success with lately having served on both the President's debt commission and the failed deficit reduction committee, also known as the "super committee."

The payroll tax break, which gives workers a 2 percent tax break, benefits 160 million working Americans with the average worker getting a $1000 tax break for the year. The extension will add $100 billion to the deficit after Republicans agreed that the payroll tax extension did not have to paid for with cuts elsewhere in the budget - a major concession for House Republicans who've insisted for months that any extension not add to the deficit.

In exchange, Republicans secured key concession on unemployment insurance. The maximum number of weeks unemployed Americans would be able to receive benefits is 73, which is fewer than the current maximum of 99 weeks in states with unemployment rates of 9 percent and higher.

Republican lawmakers also demanded change to how unemployment insurance is administered. In the deal, states would be able to require drug testing for anyone looking for work. It also would make it federal law that beneficiaries must be looking for work while receiving benefits.

To pay for the $30 billion cost of extending federal unemployment benefits, the federal government to auction off wireless spectrum. It would also require new federal workers to contribute more to their federal pensions than current federal workers.

A tougher provision that would require current federal workers to contribute more to their pensions threatened to derail talks Wednesday when negotiators, including Sen. Ben Cardin (D-MD), who represents a large number of federal workers, protested and fought for existing federal workers to be exempt.

Cardin's objections carried weight, especially after negotiators realized that the three Senate Republicans would oppose the conference agreement because they were largely excluded from negotiations. With all three Republicans refusing to sign the agreement, every Democratic vote was necessary for approval.

As part of the effort to secure Cardin's support, President Barack Obama called the senator twice.

"What survived is additional contributions for new hires" Cardin said today after signing the agreement. "I'm disappointed about that, but we did protect current workers."

As for the cost of preventing a cut in federal reimbursement for doctors who treat Medicare patients, it would be covered by cutting parts of the President's health care law, including a wellness prevention fund and reimbursements for hospitals who treat Medicare patients that don't pay their bills.

The House is expected to easily pass the bill. Its passage is also likely in the Senate though there could be some hurdles trying to get enough Senate Republican support.

"I have a simple message for my Republican colleagues" Senate Majority Leader Harry Reid (D-NV) told reporters late Thursday. "Let's get this done as quickly as possible."

Lawmakers plan to begin a week-long recess for President's Day Friday.

[Carly_EngageAmerica]

Extending the payroll tax cut is not a real solution nor does it help sustain Social Security. There are a number of other options for making Social Security a sustainable program and for reducing the deficit. Progressive price indexing would substantially reduce the long-run funding gap to $3.2 trillion from the current law funding gap of $16.1 trillion. Thus, it would only require a modest solvency tax increase equal to 0.6% of taxable payroll. In terms of long-run spending, it would result in the second smallest program, about 82 percent of the size of the current program. Also, changing the benefit formula for SS would essentially eliminate the long-run funding gap and require no additional solvency tax. It also would produce the most dramatic reduction in spending on benefits, equal to 23% of long-run spending under the current benefit formula. In addition, it would retain the progressive nature of the benefit formula, but reduces the degree of progressivity relative to the current formula. Furthermore, raising the retirement age would reduce Social Security's unfunded obligations for retiree benefits to $6.3 trillion and require a solvency tax of 1.3% of taxable payroll. It would result in the third-largest program, with about 87% of the current law spending. Moreover, though the distribution of net taxes would still be progressive, of the four potential changes considered it would reduce the degree of progressivity the most relative to current law. Finally, eliminating the taxable maximum would reduce Social Security's unfunded obligation for retiree benefits to $8.3 trillion and require a 1.3% payroll tax increase. It would result in the largest program in terms of long-run spending, and would increase the progressivity of the program (http://eng.am/sWDUJ8).

[NeedsVacation]

Congress is taking the unemployed to the cleaners, again.

This is a crisis.

If we don't discuss the important facts then we are doing ourselves a disservice.

The unemployment application report only suggest less people are losing their jobs.

It's not about unemployment applications, it's about new job
production. The unemployment application numbers have to drop since hiring has been frozen for the past 4 years. Companies can't operate with any less employees.

If high school graduates double the number of newly created jobs every year, then where are we in this recovery.

[Dgunner]

If the american people are so p---ed off at the top 1% then why don't they start buying cheaper shoes less quality clothes quit going out to movies and quit buying 40,000 dollar automobiles they don't need. Every time a american buys a product or service from the top !% they just hurt thier cause and feed the lions. I don't blame the wealthy for not wanting to give back what the poor volunteer to give them by proxy buting exspensive matieral things. The bottom poor class of americans who want to look rich but live in government housing and wear fifth ave, clothes deserve evrything they don;t get and can't afford. If the american people would grow a pair and quit high rolling on credit cards and trying to impress thier firends and relatives the country would see a set back and the wealth would distrbute itself among the economically crippled american citizens. The american people will not or refuse to live within thier means. Stay off music sites and quit buying apps.for cellphones they don't need and wear clothes they can afford and stop buying designer brands .I don't have any sympathy for any of them. Grand parents are spending thier retirement money in our indian casinos and people are selling food stamps in the parking lots of walmart the communist supporting SOBS. Until we band together and starve out the 1% shut the h--l up and go back and get in line like a good little citizen and shut the h--ll up!

[dj_chi]

I'm sorry but that is naive and ignorant on so many levels. Sure, some fiscal responsibility is good for everyone, but people still need to buy stuff to live. Saying people should live like it's 1972, with no cell phones and few other luxuries? This is still America, not Russia where people all wear whatever garbage the government told them was correct, and drive the car the government said was good enough. You're replacing a communist government's choices with your own for what's right for people to buy.

I'm no fan of making the top 1% richer at the expense of the rest of us, but your ideas for restraining them goes against basic human psychological driving forces. And it does nothing to curb some of the real issues pushing that disparity. Our founding fathers had some ideas on that and the rich have pushed those aside as a nuisance.

[Dgunner]

If the american people are so p---ed off at the top 1% then why don't they start buying cheaper shoes less quality clothes quit going out to movies and quit buying 40,000 dollar automobiles they don't need. Every time a american buys a product or service from the top !% they just hurt thier cause and feed the lions. I don't blame the wealthy for not wanting to give back what the poor volunteer to give them by proxy buting exspensive matieral things. The bottom poor class of americans who want to look rich but live in government housing and wear fifth ave, clothes deserve evrything they don;t get and can't afford. If the american people would grow a pair and quit high rolling on credit cards and trying to impress thier firends and relatives the country would see a set back and the wealth would distrbute itself among the economically crippled american citizens. The american people will not or refuse to live within thier means. Stay off music sites and quit buying apps.for cellphones they don't need and wear clothes they can afford and stop buying designer brands .I don't have any sympathy for any of them. Grand parents are spending thier retirement money in our indian casinos and people are selling food stamps in the parking lots of walmart the communist supporting SOBS. Until we band together and starve out the 1% shut the h--l up and go back and get in line like a good little citizen and shut the h--ll up!

[moretruthnow]

Great news for the middle class and even for the Party of No to finally realize that they were wrong and would never get support standing against this tax cut benefit for so many Americans who will benefit. Shameful that the GOP was opposed but at least now they have gotten an ear full and are being reasonable. Americans are going to have to keep speaking up, signing petitions and making sure that the GOP does not get away with serving only the wealthy and their desires. We are all Americans.

[wfw3536]

Obama administration throws seniors under the bus as he takes away much need money for a second year out of the social security tax/flat tax. Oh, and don't forget Obama promised this was only a one year event, just another broken promise. Within the next 10 to 15 years social security will only be able to pay seniors 60 to 70% of the benefits they earned. All Obama cares about is getting re-elected.

[moretruthnow]

What you are saying is not true. Social Security is getting an increase. The broken promises that you republicans don't care about are those tax cuts for the wealthy that are not paid for and are increasing our deficit and no jobs are showing up because of it. Republican men are busy opposing birth control now in a partsan attack on common sense and fair health care benefits for women. The GOP is losing women and they are losing more independents because they are going extremely right wing where only the most looney people still cling.