Tuesday, June 19, 2018

Congress passes extension of payroll tax cut

WASHINGTON — Congress passed a $150 billion economic package Friday, extending for the rest of the year a payroll tax reduction for 160 million workers and unemployment benefits for millions of others.

On a 293-132 vote, a bipartisan House coalition supported the compromise plan to keep giving workers a small amount of extra cash with each paycheck while also providing a continued cushion for the unemployed.

Shortly afterward, the Senate voted 60-36 to approve the plan. It now goes to President Barack Obama to be signed into law, giving him a victory on a portion of the massive jobs bill he presented to Congress last fall.

The votes ended a debate that had bitterly divided Republicans in December, with many asserting that the tax-cut extension should have been offset by spending cuts to make up for the Social Security withholding tax funds that instead went to workers.

House and Senate negotiators instead crafted a package that did not offset the $100 billion tax provision, which gives the average worker an extra $1,000 a year. But they did include spending cuts to finance the unemployment benefits and a measure to keep doctors from seeing a 27 percent drop in Medicare payments.

Opponents of the plan included conservative Republicans who complained that the tax policy was flawed and would lead to increased deficits. Some Democrats complained that the biggest cut hit federal workers because of a plan to produce $15 billion in savings by requiring new federal employees to contribute an additional 2.3 percent to their pension plans.

Overall, 146 House Republicans and 147 Democrats voted for the plan. Casting "no" votes were 91 Republicans and 41 Democrats.

In the Senate, 45 Democrats and one independent, Sen. Joe Lieberman of Connecticut, supported the legislation, along with 14 Republicans; voting no were 30 Republicans, five Democrats and one independent, Sen. Bernard Sanders of Vermont.

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, removing the issue from election-year campaigns.

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.

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