Lawmakers near deal to extend payroll tax break

This post has been corrected. See the note at the bottom for details.

One day after House GOP leaders announced they would abandon their insistence that a payroll tax break be paid for with spending cuts, negotiators are now close to a broader deal that would also extend unemployment benefits and ensure Medicare doctors don’t see a pay cut, sources said.

The possible breakthrough Tuesday comes after a tumultuous 24-hour period when House Speaker John A. Boehner (R-Ohio) and other GOP leaders in the House said they would no longer force the $20-a-week payroll tax break to be paid for -- reversing their position on the issue, which has left the GOP battered in the polls.


Boehner had hoped the overture could shake-up the stalled talks to resolve the other remaining issues. But the shift has not been embraced by the Republican rank-and-file in the House, who have been reluctant to give up their fight against a proposal that does not include spending cuts and adds to the deficit. And Senate Republicans have been noncommittal.

President Obama called on Americans on Tuesday to push Congress to act.

As talks continued, both Democratic and Republican sources familiar with the private negotiations Tuesday said a comprehensive deal now appeared to be in reach.

All three provisions -- the payroll tax cut, long-term unemployment benefits and the pay rate for doctors who treat Medicare patients -- expire Feb. 29. And with Congress scheduled to adjourn Friday for a weeklong Presidents Day recess, all sides want to avoid the appearance of being on vacation while workers see a tax hike, jobless Americans go without benefits or doctors face a pay cut.

Under emerging contours of the deal, the payroll tax would not be offset, but budget cuts would be made to pay for the other two items: the costs of extending long-term unemployment benefits and ensuring doctors that provide Medicare services would not see a pay cut, the sources said.

However, Republicans have fought for changes to the unemployment program that would reduce the amount of time jobless Americans can receive benefits from what is now a maximum 99 weeks and require jobless beneficiaries to earn the equivalent of a high school diploma. Democrats have resisted steep changes, and suggested they would be open only to more modest changes in the program.

For the record, 2:17 p.m. Feb. 14: A previous version of this post said negotiators were close to a broader deal that would ensure Medicare doctors didn’t see a pay hike. It should have said pay cut.