- The Washington Times - Thursday, February 16, 2012

Congressional leaders signed off on a final deal Thursday to extend the payroll-tax cuts and enhanced unemployment benefits through the rest of this year, setting up fights in both chambers as they struggle to convince rank-and-file lawmakers in both parties to support an agreement few like.

The deal was struck between Senate Democrats and House Republicans, who paved the way earlier this week when they dropped their insistence that the tax cuts’ revenue be offset with spending cuts elsewhere.

Instead, Thursday’s agreement means the deficit this year will be $101 billion deeper, the Congressional Budget Office said.

President Obama praised the negotiators for their deal and urged the full Congress to pass it.

“Leaders of both parties have done the right thing for our families and for our economy by reaching an agreement that will prevent a tax hike on 160 million working Americans,” he said.

House Speaker John A. Boehner, Ohio Republican, called it a “fair agreement and one that I support.”

But conspicuously absent from the agreement were Senate Republicans, who withheld their signatures from the final report. And with some Senate Democrats also not on board, the deal’s fate is particularly tenuous in the upper chamber ahead of a vote expected Friday or Saturday.

Senate Democratic leaders pressed Senate Minority Leader Mitch McConnell of Kentucky to rally his fellow Republicans to push the bill over the finish line.

“It goes without saying that this deal will not pass unless Leader McConnell gives it his blessing,” said Sen. Charles E. Schumer, New York Democrat. “Even if he won’t vote for it himself, he needs to allow enough of his members to support it so it can pass.”

In the House, Minority Leader Nancy Pelosi said, “I don’t see a scenario where our members will vote against it.” But the No. 2 Democrat, Rep. Steny H. Hoyer of Maryland, said he’ll oppose it because it requires future federal employees to contribute more toward their retirements.

And lawmakers on both sides of the aisle blasted the deeper deficits.

“We’re saying that tax cuts somehow don’t have to be paid for,” said Sen. Mark R. Warner, Virginia Democrat. “We’re advancing a policy that I believe will come back to haunt us later this year when the Bush tax cuts expire.”

Negotiators were racing to complete the agreement this week because Congress is scheduled to be on vacation next week.

The current payroll-tax cuts, unemployment benefits and full payments to doctors who treat Medicare patients all expire at the end of this month.

The final sticking point, solved Thursday, was over the proposal to require federal workers to contribute an additional 1.5 percent of their pay to their pensions — with the money going to pay for the enhanced unemployment benefits.

The provision eventually was changed to target the increase only at newly hired federal workers, requiring them to contribute 2.3 percent of their salaries toward defined benefit pensions.

The current Social Security tax cut of 2 percentage points, set to expire at the end of February, allows a worker earning $50,000 to keep about an extra $20 a week.

The payroll tax funds Social Security. Lawmakers said they will take money from regular funds to replenish the Social Security trust fund, but with the government running a deficit, that means adding to the debt rather than shifting money around.

The deal’s proposals to extend unemployment benefits and doctor payments under Medicare, however, would be offset by spending cuts.

Jobless workers currently have a maximum of 99 weeks of combined state and federal unemployment benefits. Under terms of the deal, the maximum would gradually fall to 73 weeks by later this year in states with the worst unemployment.

Stephen Dinan contributed to this report.

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