Senate Votes to Extend Payroll Tax Cut

Washington – In the ultimate cap to a year of last-minute, half-loaf legislation, the Senate voted overwhelmingly on Saturday to extend a payroll tax cut for a two months, with the chamber’s leaders and the White House proclaiming victory, even as they pushed the issue of how to extend the tax cut and unemployment benefits into the new year.

In an unusual Saturday vote, the Senate approved a $30 billion package to extend unemployment benefits, a payroll tax holiday for millions of American workers and to avoid cuts in payments to doctors who accept Medicare through February, when Congress will once again be locked in battle over whether and how to further extend those provisions.

The agreement – should it get through the House — mirrors a series of 11th-hour deals devised by the the 112th Congress that appear to solve an impending crisis, but simply push forward, most notably the agreement last summer to raise the debt ceiling. That created a 12-member Congressional committee whose job was to complete the deficit reduction goals that Congress failed to achieve on their own. That group achieved nothing, necessitating the legislation that Congress is wrangling with now.

Fight corporate influence by keeping independent media strong! Click here to make a tax-deductible contribution to Truthout.

A failure to even extend a modest tax break for 160 million Americans for a single year — something both sides would love as political feather’s in their election-year caps — is particularly remarkable in a Congress charged with far more significant items.

“Today is an important day for our country,” said Senator Harry Reid of Nevada, the majority leader, as he explained from the Senate floor Saturday why his chamber would be voting on a bill, conceived Friday in private between Senate leaders to extend the tax for only two months. “We are doing today exactly what the Founding Fathers thought we would do,” and passage of the bills is “an accomplishment important for the American people.”

The measure, which passed 89 to 10, would also speed the decision process for the construction of an oil pipeline from Canada to the Gulf Coast.

While this provision is necessary to win over Republicans who opposed the tax break, the White House moved furiously to portray that concession, which President Obama threatened to veto just a week ago, as a boon for Democrats, because the legislation calls for a tight deadline on the approval process, easing his ability to stop the project more quickly.

“This is an important step towards enacting a key provision of the President’s American Jobs Act and a significant victory for the American people and the economy, said Dan Pfeiffer, White House communications director, late Friday. “Because as independent analysts have said, failing to extend this tax cut would have had a damaging effect on our recovery and job growth.”

But Democratic aides said this concession would have the effect of killing the project because the Obama administration has said it would not grant approval on a truncated timeline.

Republicans, who have spent much of the year saying that tax breaks for Americans should not require offsets, also celebrated.

“The main thing that republicans were fighting for and got,” said Senator Mitch McConnell of Kentucky, the minority leader, also on the Senate floor, was the Keystone provision. According to the Congressional Budget Office, the bill reduces the deficit by about $3 billion.

With House members back in their districts and not expected back in the Capitol until next week, it was not clear that the legislation will even pass muster in that chamber. Many Republicans are loathe to give President Obama another few months — overlapping his state of the union address — to beat up on their party over the extension of the payroll tax cut, which many rank and file members dislike in principle.

While House Speaker John A. Boehner and other Republican leaders in the House were briefed on the Senate plan Friday, they could not commit the support of the Republican conference. “We have not signed off on anything at this point,” said Kevin Smith, a spokesman for Mr. Boehner, “and no decisions will be made until we talk to our members.”