WASHINGTON — A top lawmaker said late Wednesday that the House and Senate had sealed a final agreement on legislation to renew a 2 percentage-point cut in the payroll tax and jobless benefits for millions of unemployed workers.
Montana Democratic Sen. Max Baucus announced the agreement after a long day of wrangling over final details of the measure, which is a top priority of President Barack Obama.
The announcement paved the way for votes in both House and Senate this week.
The measure represents a tactical retreat for Republicans, who are generally unenthusiastic about the legislation but eager to move beyond the issue. With campaign season starting, they don’t want President Barack Obama and Democrats in Congress to be able to claim the GOP was standing in the way of a middle-class tax cut.
The measure carries a price tag of roughly $150 billion over the coming year, partly financed or “offset” through requiring federal workers to contribute an additional 1.5 percent of their earnings toward their pensions. That provision, bitterly fought by federal unions, would generate $15 billion over the coming decade.
Aides said a key Democratic negotiator, Sen. Ben Cardin of Maryland — and a strong defender of the federal workers who populate the Washington suburbs of his state — had balked at the measure because of a provision requiring federal workers to contribute more to their pensions.
Cardin and powerful House Democratic Whip Steny Hoyer, also of Maryland, worked behind the scenes to try to replace the pension provision with less burdensome curbs on federal worker pay.
The legislation would continue a 2-percentage-point cut in the Social Security payroll tax, renew jobless benefits averaging about $300 a week for people languishing for long periods on unemployment rolls and protect doctors from a huge cut in their Medicare reimbursements.
Obama got his licks in even as talks neared a conclusion.
“I’m glad to see that Congress seems to be … making progress on extending the payroll-tax cut so taxes don’t go up on all of you and 160 million working Americans,” he said. “It will make a real difference in the lives of millions of people.”
Auctions of portions of the communications spectrum to wireless companies would net another $15 billion or so — even after $7 billion is set aside to construct and run a new public safety network for emergency first-responders.
Extending the payroll-tax cut and renewing long-term jobless benefits were key planks in Obama’s jobs program. The measures are intended to help the economy by giving people more money to spend, fattening a typical bimonthly paycheck by $40 or so, and giving the unemployed critical cash that most of them turn around and spend immediately.
The measure also includes a key adjustment to the badly broken Medicare payment formula for doctors.
