Acting upon concerns that lawmakers are never able to agree on important issues, they made an extra effort on Thursday to avoid a federal government shutdown by passing a $1 trillion spending bill. Now that they’ve passed this crucial bill, lawmakers have room to work on at least a short-term payroll tax cut extension set to expire at the end of the year.
Spending Bill Approved with Last-Minute Concessions
The spending bill was finalized late Thursday after a bit of back-and-forth negotiating along party lines. Republicans had proposed to impose stricter limits on travel to Cuba, which would overturn a previous Obama policy that allows for individuals to visit and send money to relatives. Democrats were able to win a last-minute concession to drop the proposal, keeping Obama’s policy intact.
Earlier in the week, Republicans complained that the spending bill could have been passed sooner but Democrats were holding it hostage by refusing to close a deal until Republicans also agreed to make concessions on the payroll tax cut.
Democrats, however, said that their approach was the result of fear that House Republicans would adjourn immediately after passing the spending bill. This would have left the Senate with a payroll tax cut bill the House proposed on Tuesday that incorporated a requirement to speed up government approval of the Keystone XL oil pipeline, something Democrats and President Obama disapproved of.
Payroll Tax Cut is the Next Priority
Now that the spending bill has been passed, lawmakers say they will place their focus on extending payroll tax cut into 2012. There are still a number of issues to work out, including how to fund the cut that could exceed $200 billion in costs over 10 years, as well as whether House Republicans will agree to drop the Keystone XL oil pipeline project.
Most lawmakers are interested in agreeing to a yearlong extension of the payroll tax cut, which is currently a drop in Social Security taxes from 6.2 percent to 4.2 percent.
The bill would also extend unemployment benefits, but lawmakers are disagreeing about how they should be extended. Currently, Democrats want to continue allowing jobless workers to claim up to 99 weeks of benefits while Republicans are pushing to drop the total number of weeks to 59.
Officials say if they can’t come to a yearlong agreement, they are prepared to fall back on a two-month extension. However, they plan to continue working on a long-term compromise on Friday to avoid re-visiting the issue at the beginning of the year.
To assure Congress that the goal is to pass a long-term bill, House Speaker John Boehner (R-Ohio) announced on Thursday that he would call the House back to session next week if necessary to approve a payroll tax cut compromise.
