Tentative Deal Struck to Extend Payroll Tax Cut, Unemployment Benefits [Updated]

By
Senator Max Baucus.
Senator Max Baucus. Photo: YURI GRIPAS/2011 AFP

Without the fanfare of the December payroll tax face-off, a House-Senate committee responsible for crafting a compromise on the payroll tax cut and unemployment benefits reached a tentative agreement Tuesday night. The measure is expected to go to a vote before Friday, barring any wrangling on Wednesday.

If approved, the deal would lengthen the payroll tax cut throughout 2012, extend unemployment benefits with a maximum number of 73 weeks coverage, and prevent a cut in reimbursements to doctors who accept Medicare patients.

Negotiated mainly by Senator Max Baucus (D-MT), who sat on the failed Supercommittee last year, and Representative Dave Camp (R-MI), the tentative deal materialized only a day after Speaker Boehner basically said "Screw it" to the Republican plan to tie the payroll tax cut to other cuts in the budget.

And so two-thirds of the total $150 billion-package represents the cost of the payroll tax cut extension, which stands to benefit 160 million Americans, would not be paid for; the remaining $50 billion is the price tag for the unemployment benefits and coverage for doctors' Medicare reimbursements, which would be paid for through changes to federal workers' pension (pushed by Republicans) and cuts in the new prevention and public health fund.

Democrats are "giddy" over the deal, according to Politico. Some Republicans sound like sad puppies with their tails tucked between their legs.

“I don’t have a view on it right now,” Senate Minority Leader Mitch McConnell (R-KY) said of the agreement, “but I certainly understand their feeling of frustration that this conference doesn’t seem to be getting anywhere.”

“Leadership clearly has a positive desire to put this behind us,” said Representative Bill Huizenga (R-MI), “and are not as open to listening to the rest of the conference to find out what the conference thinks.”

Update: Lawmakers put their final signatures on the deal around 11 p.m. Wednesday night. “If the agreement comes together like I expect it will, the House should vote this week,” House Speaker John Boehner told reporters.