House votes to extend payroll tax cut; Senate likely to vote today

WASHINGTON -- The House of Representatives voted 293 to 132 Friday to extend a payroll tax cut and maintain Medicare reimbursement rates. The bill is expected to be voted on in the Senate later in the day.
In December, a short-term extension was passed, but the new bill faced opposition from House Republicans, who were demanding spending cuts to pay for the measure. This week, House Speaker John Boehner said he was willing to compromise, paving the way for the bill to move ahead.

The package as agreed on by House and Senate negotiators would extend the reduction by 2 percentage points in the Social Security payroll tax until the end of the year. It would also extend long-term unemployment benefits but reduce the maximum number of weeks insurance can be claimed.

In debate before the vote, Minority Leader Nancy Pelosi (D-Calif.) praised the work of her House colleagues.

“This represents a victory to have a payroll tax for the middle class. It’s important for those families because it puts $40 more into a paycheck,” she said. “It has a macroeconomic effect because those families will spend that money and put it into the economy. That is a job-creator.”

“This was a fight,” Pelosi added. “Why should it have been a fight? The American people are watching and they have little appetite to see us fighting.”

In part, the tax cut will be funded by reducing government contributions for new federal employees’ pension pots. Despite broad agreement on the package, some Democrats with large numbers of government workers in their districts said they would vote against the bill because of the reductions.

“I’m going to vote no to send a message that enough is enough when it comes to using the federal workforce as a piggybank for our national programs,” said Rep. Chris Van Hollen (D-Maryland). “They are an easy political target for some.”

Although the bill passed comfortably in the House, its passage through the Senate could be more rocky. In a gentle dig, Senate Majority Leader Harry Reid urged Senate Republicans to support the bill.

“The Republican leader has made it pretty clear that we will get Republican support,” he said. “An agreement to solve these issues was possible because Republicans learned the meaning of the word ‘compromise.’ ”

Sen. Dave Camp (R-Michigan) indicated some Republican support for the bill. “Most importantly this agreement includes no more job-killing tax hikes to pay for government spending,” he said.