Congressional leaders back deal on $150B economic package

February 16, 2012

Amid some dissent, House and Senate leaders prepared for final votes Friday on an economic package worth more than $150 billion that would extend a payroll tax holiday and unemployment benefits for the rest of the year.

While Senate Republicans protested, the remaining members of a House-Senate committee tasked with forging a compromise pronounced themselves satisfied with the deal, signing the 270-page measure on Thursday afternoon in a bipartisan ceremony that stood in sharp contrast to the otherwise bitterly partisan tone of this Congress.

Key congressional leaders endorsed the plan, providing optimism that it would clear the House by midday Friday but setting up a potential cliffhanger vote in the Senate later in the day. House Minority Leader Nancy Pelosi (D-Calif.) told reporters Thursday that the plan probably would be “acceptable” to most of her members, and House Speaker John A. Boehner (R-Ohio) called it “a fair agreement, and one that I support.”

President Obama urged Congress “to pass this agreement so that the payroll tax cut we put in place last year will not expire at the end of this month.”

The bill would extend a reduction of two percentage points in the 6.2 percent Social Security payroll tax through 2012 for about 160 million workers, saving the average family about $1,000 for the year and removing the issue from election-year campaigns.

A key roadblock was overcome when congressional negotiators agreed to require only new federal workers to contribute more to their pension plans, clearing the way for the announcement of a deal at 12:30 a.m. Thursday.

“This is good for the country; it’s very good for the country. We have an agreement,” Sen. Max Baucus (D-Mont.) said at a hastily arranged post-midnight news conference in a hallway. He was joined by Rep. Dave Camp (Mich.), the lead GOP negotiator.

In addition to a 10-month extension of the payroll tax holiday and unemployment benefits, House Republicans won a reduction in unemployment eligibility, which would drop the maximum tenure for receiving benefits from its current limit of 99 weeks in many states. Under the deal, the unemployed in most states would be able to claim 63 weeks of jobless benefits, but workers in states hardest hit by the recession would be eligible for 73 weeks.

The legislation also would temporarily fix Medicare’s payment plan, intended to prevent a 27 percent drop in fees paid to doctors who treat elderly patients.

Three Senate Republicans who participated in the conference committee — which was established in December to work out differences between House and Senate proposals — were the only ones who did not sign the document. Sens. Jon Kyl (Ariz.), Mike Crapo (Idaho) and John Barrasso (Wyo.) protested because, despite participating in several weeks of talks, they were largely left out of the final phase of the Baucus-Camp talks.

Senate Minority Leader Mitch McConnell (R-Ky.) remained silent about the compromise. Since the 2010 midterm elections swept Boehner into the House speaker’s chair, McConnell has played a pivotal role in almost every compromise that has reached Obama’s desk, leading Democrats to preemptively lay the blame at his feet if the measure failed to win the 60 votes needed to clear a filibuster.

“It goes without saying that this deal will not pass unless Leader McConnell gives it his blessing. Even if he won’t vote for it himself, he needs to allow enough of his members to support it so it can pass,” said Sen. Charles E. Schumer (D-N.Y.).

Without Senate GOP support in the conference committee, Baucus and Camp turned to the panel’s Maryland Democrats, Sen. Benjamin L. Cardin and Rep. Chris Van Hollen, who had been holding out support because of tough new contribution requirements for all federal workers to their pension plans.

Obama weighed in with a call from Air Force One to each lawmaker, eager for a victory on two pieces of jobs legislation that he requested in September. He had offered a far-reaching $447 billion legislative package that also included spending on highway construction and schools, as well as aid to states to bolster teachers and local police forces, but those more ambitious pieces met opposition in Congress.

With Cardin and Van Hollen holding out, Obama won their signatures for the deal by getting Baucus and Camp to shield current federal employees from the increased pension contribution.

The legislation still has many critics, including Republicans and Democrats who said Social Security’s coffers would be hurt by an extension of the payroll tax break. By Thursday night, at least a handful of Senate Democrats had publicly opposed the package, meaning that at least a dozen Senate Republicans need to support it to reach the 60 votes.

Some Washington area lawmakers indicated Thursday that they will oppose the deal. House Minority Whip Steny H. Hoyer (D-Md.) accused Congress of “targeting” federal workers while still not requiring millionaires to pay higher taxes. “For that reason, I cannot support this bill,” he said.

Sen. Mark R. Warner (D-Va.), also citing the pension issue, lamented the fact that the cost of the payroll tax holiday would not be offset. “We’re advancing a policy that I think will come back to haunt us,” he said.

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