House leaders accept Senate tax terms
WASHINGTON -- Congressional leaders reached an agreement Thursday to approve a $33 billion two-month extension of the current payroll tax cut and unemployment benefits that are set to expire Dec. 31, ending a partisan standoff that had paralyzed Washington at the height of the holiday season.
"Sen. Reid and I have reached an agreement that will ensure taxes do not increase for working families on Jan. 1," House Speaker John Boehner said in a brief statement announcing the agreement.
The short-term deal extends the current payroll tax rate at 4.2% from 6.2% and continues to provide unemployment benefits for the long-term unemployed. It also includes a Medicare "doc fix" that will prevent a drop in payments to doctors who treat seniors, and it extends and funds the Temporary Assistance for Needy Families program that provides welfare benefits to 4.6 million Americans.
The impasse was brokered in part by the Senate's top Republican, Minority Leader Mitch McConnell, R-Ky., who broke with House GOP leaders and called on them to approve the short-term patch in exchange for Senate Democrats formally naming negotiators to finalize a full extension through 2012 when Congress returns in January.
"House Republicans sensibly want greater certainty about the duration of these provisions, while Senate Democrats want more time to negotiate the terms," McConnell said in a statement. "These goals are not mutually exclusive. We can and should do both."
President Obama, who had called Boehner on Wednesday to urge the deal, applauded the news, saying: "This is the right thing to do to strengthen our families, grow our economy and create new jobs. This is real money that will make a difference in people's lives."
Lawmakers in both parties broadly agree on a one-year benefits extension in principle, but there remain partisan divisions over how to pay for the expected $200 billion cost of a longer term extension. That fight will continue next year.
Boehner, R-Ohio, informed House Republicans in a conference call Thursday evening of the terms of the agreement. He did not take questions from lawmakers on the call. House Republicans will now approve the Senate's short-term extension that they had rejected on Tuesday, and Reid will appoint lawmakers to work on a one-year extension.
"I look forward to appointing members of my caucus to continue negotiations toward a year-long agreement. Two months is not a long time, and I expect the negotiators to work expeditiously to forge year-long extensions of these critical policies," Majority Leader Reid, D-Nev., said in a statement in which he said he was thankful "voices of reason" prevailed.
The new agreement includes a minor concession by Senate Democrats to make it easier for employers to process the tax break. The House and Senate are expected to approve the extension on Friday by unanimous consent, which means lawmakers will not have to return to Washington.
The fight came with a political cost to House Republicans, who faced mounting pressure from Democrats and within the party ranks to back down from their call to negotiate a one-year extension by Dec. 31 — a demand that risked allowing the benefits to expire.
McConnell's break from House Republicans crystallized that their position was losing ground, but House Republicans were under pressure from other lawmakers as well to accept a short-term fix. Sen. John McCain, R-Ariz., told CNN on Thursday that "Republicans are losing this fight. We need to get back on track."
Obama used the impasse to cast congressional Republicans as the cause of Washington dysfunction at a time of historic disapproval ratings for Congress. "This is an issue where an overwhelming number of people in both parties agree. How can we not get that done? I mean, has this place become so dysfunctional that even when people agree to things we can't do it?" he said at the White House.
Obama is expected to travel to Hawaii for his Christmas vacation now that the deal has been reached.
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