Deal reached on two-month payroll tax cut extension
Congressional negotiators have reached a tentative agreement on a two-month extension of President Obama’s payroll tax cut, with a vote expected in the Senate on Saturday, sources said.
Democrats and Republicans could not find consensus on how to pay for a yearlong extension of the tax break, which expires on Dec. 31 and gives an average $1,000 benefit to 160 million. It assures the volatile political issue will continue into the new year.
Sen. Mitch McConnell of Kentucky, the Republican leader, said he expected the compromise would find support.
“I’m optimistic we’re going to do well in the morning,” McConnell told reporters. “So we’ll be back discussing the same issues in a couple of months.”
The package includes a Republican-backed provision to accelerate a review of the controversial Keystone XL oil pipeline project, a provision Obama had rejected as a deal-breaker.
It also includes a two-month extension of long-term unemployment benefits, which had been a Democratic priority, and a two-month pay adjustment for doctors who treat seniors on Medicare. Dropped was a Republican-led provision that would roll back air regulations on industrial boilers that emit mercury and other pollutants.
The House, which passed a Republican-backed payroll tax cut package earlier this week, had not been a formal part of the negotiations. Members had completed their work Friday and left for the holidays -- though were told they could be called back to Washington at any moment to vote on a deal.
The close to $30 billion package would be paid for by increasing a fee on loans backed by Fannie Mae and Freddie Mac, a revenue source that had received support from both parties in the past.
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