Congress strikes a deal on payroll cut

[babylonsister]

Posted with permission.

http://maddowblog.msnbc.msn.com/_news/2012/02/16/10424337-congress-strikes-a-deal-on-payroll-cut

Congress strikes a deal on payroll cut
By Steve Benen
-
Thu Feb 16, 2012 8:00 AM EST


It wasn't easy, and there were times yesterday when the deal was in doubt, but shortly after midnight, as Tricia noted earlier, bipartisan talks produced an agreement on extending the payroll tax break through the end of the year.

Members of a House-Senate committee charged with writing a measure to extend a payroll tax reduction said Wednesday that their work was done, just shy of an hour before their deadline to get a bill ready for a Friday vote.

After fighting until the very final hour over how to pay for parts of a $150 billion plan that would also extend unemployment benefits and prevent a pay cut for doctors who accept Medicare, leaders of both parties put together a bill that the majority of the committee could support.

Though passage is not assured -- in this Congress, nothing is ever assured -- officials in both parties expressed optimism about the outcome. Because the package will be approved by a conference committee, the deal will reach the floor of both chambers without amendments or changes, which should expedite the process.

The agreement, which many believe will be the last significant legislative achievement of 2012, represents a win for the White House -- this was a key element of President Obama's American Jobs Act -- and serves as the only real example of this Congress reaching a major bipartisan compromise.

So, what's in it?

* Payroll tax cut: The deal will extend a 2% cut to the Social Security payroll tax, at a cost of about $100 billion, giving the typical American worker roughly $1,000 more in take-home pay this year. How will this be paid for? It won't be -- GOP leaders, in a concession that made the larger deal possible, agreed this week that the cost of the cut need not be offset at all. (The money that would have gone into the Social Security trust fund will be paid for out of the general fund.)

* UI and the "doc fix": The other two major elements of the larger package were also approved, including an extension of unemployment benefits. As part of the compromise, however, Republicans were able to reduce maximum eligibility from 99 weeks to 73 weeks.

* Financing: To pay for the non-payroll provisions, lawmakers agreed to sell radio spectrum licenses, as well as forcing new federal workers to pay more into their government pensions. Dems gave up on the millionaire/billionaire surtax fairly early in the process.

* Extraneous measures: Republicans wanted new education requirements for beneficiaries, but didn't get them. The GOP is not leaving completely empty handed, though -- states will be allowed to conduct drug tests on those who lost their jobs for failing a drug test (states can already do this) and must prevent welfare aid from being spent at casinos, liquor stores, or strip clubs (states have already done this).

Cutting through the clutter, the bottom line is pretty straightforward: Democrats and economists didn't want the economy to take a hit from an expiring payroll break, and once Republicans caved on the key point, a deal came together. If approved, the agreement will bring a sigh of relief to many concerned about 2012 economic growth.

A House vote should come tomorrow. While the Senate has not yet scheduled its vote, members are poised to be out next week, suggesting the deal should reach the floor no later than Saturday.

[mucifer]

1. some pretty bad stuff in there.

no millionaire/billionaire surtax. Making the 99ers into 73ers is just horrible.

Some pretty sucky things in there.

[ProSense]

2. This

* UI and the "doc fix": The other two major elements of the larger package were also approved, including an extension of unemployment benefits. As part of the compromise, however, Republicans were able to reduce maximum eligibility from 99 weeks to 73 weeks.

...still appears to be by the end of the year.

Republicans wanted to cut it to 59 weeks.

Republicans claimed victory in reducing the number of weeks of jobless benefits that workers would be eligible to receive. The maximum number in states with the highest jobless rates would be cut from 99 weeks to 73 weeks by the end of the year, according to aides in both parties. Republicans had wanted to cut the maximum to 59 weeks.

http://www.latimes.com/news/nationworld/nation/la-naw-payroll-tax-20120216,0,292176.story

Most states are already indexed to a rate that have will end EB.

Unemployment benefits deal drops weeks by 26

By Vicki Needham

Although details are still being worked out, a series of changes in unemployment benefits would eventually drop the maximum number of weeks by about 26 this year, according to several sources.

Under legislation being drawn up as part of the payroll tax cut package, states would receive a maximum of 73 weeks of benefits for the rest of the year assuming no states continue to qualify for a federal extended benefits program (EB) that provides up to 20 additional weeks of benefits, according to a Democratic aide.

The EB program will gradually wind down this year for most states — there are 33 that qualify — with most losing those additional 13 or 20 weeks of benefits over the next four months, cutting benefits back to a maximum of 79 weeks, according to the National Employment Law Project.

Only five states will still qualify for those EB benefits after June, according to research by NELP.

<...>

The Obama administration had outlined in its jobs bill last fall that the EB program would be allowed to expire this year, bringing the maximum down to 79 weeks.

- more -

http://thehill.com/blogs/on-the-money/801-economy/211053-unemployment-benefits-deal-drops-weeks-by-

State-By-State Guide to Federal Unemployment Insurance
http://democrats.waysandmeans.house.gov/media/pdf/112/StateGuidetoUI.pdf

As for this, it's completely absurd.

* Extraneous measures: Republicans wanted new education requirements for beneficiaries, but didn't get them. The GOP is not leaving completely empty handed, though -- states will be allowed to conduct drug tests on those who lost their jobs for failing a drug test (states can already do this) and must prevent welfare aid from being spent at casinos, liquor stores, or strip clubs (states have already done this).