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The House on Friday passed an extension of the payroll tax cut and long-term jobless benefits, kicking it over to the Senate where leaders were scrambling to set the stage for a vote amid bipartisan concerns.
Despite deep opposition to the bill in some corners, it easily cleared the House on a 293-132 vote. The vote will be tight in the Senate, but sources told Fox News that Senate Democratic Leader Harry Reid was able to win a last-minute rule change from Republicans that will make passage much easier to achieve. Republicans are allowing passage with just 50 votes, abandoning the usual 60-vote hurdle for such bills.
The $143 billion package, which also would forestall deep cuts in Medicare reimbursements to doctors, would extend the 2-point payroll tax cut for the rest of 2012.
Approval would hand election-year bragging rights to President Obama, who made the tax cut and jobless benefit extensions a cornerstone of his September jobs package, over objections from many Republicans.
Extending the 2 percentage-point cut in the 6.2 percent Social Security payroll tax would save around $80 monthly for someone earning $50,000 a year.
House Republicans initially blocked a two-month extension of the tax cut and jobless coverage in late December, only to retreat quickly under a buzz saw of opposition from conservative and GOP leaders from around the country. With that history and elections looming, Republicans seemed ready to get the fight behind them and change the subject for the rest of this election year.
“We don’t control Washington. Democrats still control Washington — they control the Senate and they control the White House,” said Rep. Dave Camp, R-Mich., the top House negotiators on the measure. “A divided government must still govern.” Camp cited stricter job search requirements for people receiving unemployment benefits and other reforms to the program as wins for conservatives.
But many lawmakers on both sides of the aisle were upset that the measure would add to the federal deficit and doubted that it would do much to boost the economy.
“I cannot and I will not support legislation that extends the payroll tax holiday without paying for it,” said Rep. Phil Gingrey, R-Ga. “This will add $100 billion to the deficit and it will create an even greater shortfall within the Social Security trust fund that already has over $100 billion shortfall just in the last two years.”
And the No. 2 Democrat in the House, Steny Hoyer of Maryland, excoriated the measure for cutting the retirement benefits of new federal hires.
“The only individuals paying for this bill out of 315 million Americans are the two million civilian workers who work for us, who work for all of us, who day after day, week after week, month after month,” Hoyer said.
Some Democratic senators were also defecting because of cuts the bill would make for civil servants’ benefits and health programs. Many Republicans were opposed because the measure would add $89 billion to federal deficits over the coming decade.
The reduction in the Social Security payroll tax, which is deducted from workers’ paychecks, would cost $93 billion through 2022. In a sudden concession this week that made bipartisan agreement possible, House Republicans dropped their demand that the tax cut be paid for with spending reductions.
In a GOP win, coverage for the long-term unemployed would be cut from the current maximum of 99 weeks to a ceiling of 73 weeks by this fall in states with the worst job markets, with most topping out at 63 weeks.
The $30 billion cost of the extended benefits would be paid for half by government sales of parts of the nation’s broadcast airwaves, half by requiring federal workers hired after this year to contribute an additional 2.3 percent of their pay for their pensions, up from the current 0.8 percent.
That increase also would apply to members of Congress, but only those who begin service as of next January — exempting every current lawmaker.
The bill also would prevent a 27 percent cut in federal payments to doctors who treat Medicare patients, a reduction that threatened to make it harder for seniors to find physicians.
That would cost about $18 billion. It would be paid for by trimming Medicare reimbursements to health care providers to cover unpaid medical bills, cutting payments to hospitals that treat large numbers of poor patients and cutting a fund created in Obama’s health care overhaul for preventing diseases caused by smoking and obesity.
The Associated Press contributed to this report.
