The payroll tax cut extension that has been the center of tough debates in Congress over the past few weeks appears to be heading toward a two-month extension. House Speaker John Boehner announced on Thursday that GOP members had dropped their opposition to the Senate’s short-term extension passed on Sunday.
Payroll Tax Cuts Extended on Short-Term Basis
For weeks, Congressional lawmakers in the Senate and House battled across party lines to pass their versions of a payroll tax cuts extension.
The majority of Senate members pushed for an extension that could sustain the currently-lowered rate of 4.2 percent Social Security payroll tax cut, while maintaining emergency federal unemployment benefits at 99 weeks and issuing Medicare physicians their scheduled 27 percent cut in payments. These tax cut extensions would all last through Feb. 29.
House Republican members announced their strong opposition to the two-month deal, pushing instead for a one-year extension that would adjust the number of weeks jobless workers could claim emergency unemployment benefits to 59.
House members also wanted to incorporate early approval of the XL Keystone oil pipeline project that would bring oil from Canada to Texas. The Senate added expedited approval of this project in its short-term bill.
Boehner said on Thursday that, despite his party’s opposition to the short-term solution, he’d struck a deal with Senate Majority Leader Harry Reid on the Senate’s bill, but only on the condition that they work toward a long-term solution immediately.
Committee to Negotiate Long-Term Tax Cut Extension
Under the terms of the agreement between Boehner and Reid, Senate will be required to immediately appoint members to negotiate a longer-term tax cut extension early next year. As a result of Senate members being unable to determine a way to pay for a payroll tax cut bill that could last one year, Boehner says it is their job to make sure all measures are in place for 2012.
He explained that the deal would also tweak language in the Senate bill to lessen the tax reporting burden on small businesses. At the time of his announcement, no further details were available; however, experts expect the negotiated bill to largely mirror the one passed in Senate.
The House is expected to pass a vote on the payroll tax cut bill as early as today.
