The Washington Post

Negotiators reach deal; vote expected soon on $150B economic package


President Barack Obama arrives at Los Angeles International Airport in Los Angeles, Wednesday, Feb. 15, 2012. (AP Photo/Damian Dovarganes) (Damian Dovarganes/AP)

Congressional negotiators gave final approval early Thursday to an economic plan worth more than $150 billion that would extend a payroll tax holiday and unemployment benefits.

A key roadblock was overcome when the lawmakers agreed to require new federal workers to contribute more to their pension plans, clearing the way around 12:30 a.m. for a majority of the House-Senate conference committee to begin signing onto the deal.

The pension provision represented a concession to key Maryland Democrats who, even after prodding from President Obama, did not grant their support until current federal workers were shielded from the new pension plan, aides in both parties said.

A vote could come as early as Friday, the last act in a five-month battle over Obama’s proposed jobs plan.

“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 press conference in a Capitol hallway. Baucus was joined by Rep. Dave Camp (Mich.), the lead GOP negotiator.

Baucus, the Senate Finance Committee chairman, had prematurely declared a “deal” was at hand at 11 p.m. Wednesday. He then spent 90 minutes huddled inside Camp’s office.

Camp assured reporters later that the final talks were about “technical things” in the bill’s legislative language and that more than enough senators and House members had agreed to the substantive issues to ensure the bill would be published later Thursday.

“We have an agreement and we’re moving forward,” Camp, chairman of the House Ways and Means Committee, said.

The bill — which some Obama aides say is likely to be the last significant legislation passed before the November elections — includes a 10-month extension of a payroll tax holiday that lets the average worker keep an extra $1,000 a year. The deal also would extend unemployment benefits through the end of 2012. But it reduces the tenure on unemployment by the end of the year to 63 weeks in states moderately impacted by the recession and 73 weeks for those with the highest jobless rates.

The plan is about one-third the size of the original jobs legislation Obama proposed in September. It includes a temporary fix for Medicare’s payment plan, intended to prevent a 27 percent drop in fees paid to doctors who treat elderly patients.

The final talks were hung up on the need to find about $50 billion in spending cuts and new revenue to offset the $50 billion cost of the unemployment extension and the Medicare change.

The Senate side of the conference committee, with four Democrats and three Republicans, found itself stalled late Wednesday. Initial plans called for drawing $15 billion in savings by requiring all federal workers to make increased contributions to their pension plans, prompting an objection from Sen. Benjamin L. Cardin (D-Md.). The three Senate Republicans demanded an exemption from portions of the 2010 health-care law for physician-owned hospitals, a move Democrats opposed.

This left the conference committee one senator shy of the number needed to sign off on a final agreement.

Cardin - working closely with Rep. Chris Van Hollen (D-Md.), also on the conference committee - would only agree to support the plan once Baucus and Camp agreed to shield current federal employees from the increased pension contribution.

The Democrats would only agree to support the plan once Baucus and Camp agreed to shield current federal employees from the increased pension contribution. The final details of that pension increase were unclear early Thursday, but initial estimates on Wednesday suggested federal workers would need to pay an additional 0.75 percent to their pension plans.

In addition to the pension issue, Baucus and Camp agreed to cut $5 billion from a fund created under the health-care law to help primary-care physicians prevent illness — a fund that the president singled out for a similar cut in the budget for fiscal 2013 that he announced Monday.

Another last-minute dispute, according to lawmakers and aides in both parties, involved a plan to raise at least $15 billion in revenue from selling off public spectrum to telecommunication companies for better mobile communication. This has been a key issue for homeland security officials ever since the Sept. 11 terrorist attacks, after which emergency first responders began requesting their own frequency to better communicate with federal officials during disasters.

On Wednesday, negotiators agreed to auction off $22 billion worth of the spectrum to the industry, then siphon $7 billion of that into a fund for federal maintenance of a frequency dedicated to emergency first responders.

Republican leaders, who had been divided on the payroll tax package in December, decided over the weekend that the best decision on the contentious issue was to support a plan that would not require offsetting cuts for the tax holiday, which is worth about $100 billion. That decision, a reversal of their previous position, made the final negotiations much easier.

By early Wednesday, House GOP leaders were anxious to reach an agreement to put the issue behind them and refocus their agenda for the rest of the year.

“If the agreement comes together like I expect it will, the House should vote this week,” House Speaker John A. Boehner (R-Ohio) told reporters Wednesday morning.

Paul Kane covers Congress and politics for the Washington Post.

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