Congress passes payroll tax, unemployment extension

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WASHINGTON -- Republicans and Democrats came together today to extend an expiring payroll tax break, to preserve unemployment benefits and to stave off cuts in physicians' Medicaid reimbursements.

The House approved 293-132 and the Senate approved 60-36.

The payroll tax break extension, which amounts to about $1,000 a year for workers earning $50,000 a year, was a key part of President Barack Obama's domestic agenda. Its major proponent was Sen. Bob Casey, D-Pa.

"Passage of the payroll tax is a big victory for Pennsylvania and working families across the country," Mr. Casey said after the votes. "I continued to fight to keep this middle-class tax cut because it ensures more take-home pay for 160 million Americans and keeps in place an important economic driver."

Congress had been wrangling over details for months. At issue was how to pay for the measures. Democrats proposed a new tax on millionaires while Republicans wanted to freeze pay for federal workers.

Neither side got what they wanted.

The measures will be funded through a mixture of sources including a hike in benefit contributions for future federal workers, an auction of licenses allowing wireless carriers to access electromagnetic spectrum, a reduction in reimbursement rates for medical laboratory services and a reduction in the amount of federal funds used to cover medical centers' debt from Medicare and Medicaid patients who fail to remit co-payments.

"This agreement shows the American people that Congress can govern and Washington can work," said Rep. Dave Camp, R-Mich., who was chairman of the joint committee that negotiated the agreement. "This is a significant victory."

Democrats who voted no lamented the bill's reliance on benefit contributions from future government workers. They said the change will make it more difficult to attract government workers.

"I'm for almost all of this bill, but what we are funding this bill with was unnecessary, unfair and ought to be rejected," Minority Whip Steny Hoyer, D-Maryland, said during a floor speech today. "This Congress is on the path to be the most anti-federal-worker Congress that I have served in."

Opponents also complained that the bill should have made the so-called doc fix permanent. Instead, it expires at the end of the year along with the payroll tax break and unemployment benefit extension.

"We're playing a game, and the doctors all over this country and the Medicare recipients all over this country know we're playing a game," Mr. Hoyer said. "We're giving them no certainty, no confidence that come September, October, November we won't have another one of these silly little debates."

Pennsylvania Republican Sen. Pat Toomey, meanwhile, said the vote amounted to a failure to put government on a responsible fiscal path.

He said the payroll tax cut won't stimulate economic growth, and that the funding sources for identified by the conference committee should be used to pay down the deficit, not fund more spending.

Rep. Frederick Upton, R-Mich, meanwhile, said the bill is imperfect, but it offers a measure of relief to the needy.

"Our long term goal is certainly much bigger," Mr. Upton said. "We've got to fix the economy. We've got to create jobs."

Bureau Chief Tracie Mauriello: or 703-996-9292.


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