Obama Signs Bill Extending Payroll Tax Break, Unemployment Benefits

President warns that much work needs to be done when lawmakers return.

ByABC News
December 23, 2011, 11:37 AM

Dec. 23, 2011— -- President Obama hailed the extension of the payroll tax cuts and unemployment benefits, which Congress passed today and he signed after weeks of bitter, partisan standoff that divided Republicans.

Thanking members of Congress and the American public, Obama warned that more work remains and urged lawmakers to "keep working without drama, without delay."

"We're going to have to roll up our sleeves together, Democrats and Republicans, to make sure that the economy is growing and to make sure that more jobs are created," the president said today.

Obama, who put his Hawaiian vacation on pause because of the stalemate, praised members of Congress a day after deriding the "ridiculous Washington standoff" and questioning whether the process had become "dysfunctional."

He also thanked Americans, thousands of whom responded to the White House's campaign asking people what a loss of $40 from their paycheck would mean to them.

"I promise you, the American people, your voices made a difference on this debate," he said. "You reminded people in this town what this debate and what all of our debates should be about: It's about you; it's about your lives; it's about your families."

The House and Senate this morning passed a bill extending payroll tax cuts and unemployment benefits for two months, after reaching an agreement Thursday evening.

House Speaker John Boehner made it clear he was unhappy with the bill but conceded that House Republicans were on the losing end of a political battle. "Sometimes it's politically difficult to do the right thing," he said Thursday.

Boehner ignored a blitz of questions asking how he felt about the agreement.

House Republicans had wanted a longer, one-year extension rather than a short-term fix but were assailed by Democrats for not wanting to extend cuts for 1.6 million Americans. Even Senate Republicans, who voted overwhelmingly for the short-term extension, chided their House counterparts for fighting a politically risky battle.

When the next session begins, Republicans and Democrats will work to ink out a deal to extend the cuts for one year. Disagreements on how to pay for a long-term extension as well as how to reform the unemployment insurance program linger, and the process is likely to once again spark partisan wrangling.

House Minority Whip Steny Hoyer, D-Md., and his Democratic colleagues today declined to detail their strategy heading into the bipartisan negotiations, which are expected to begin shortly after Jan. 1.

"Now is not the time to get into the specifics of the negotiations," Hoyer said. "There are differences between the two parties, which was why this extension was necessary. And we'll obviously have to deal with those details."

House Minority Leader Nancy Pelosi, D-Calif., today appointed five Democrats to join the negotiations next month. Senate Majority Leader Harry Reid, D-Nev., appointed four Democratic senators to partake in the negotiations, a move that House Republicans demanded in exchange for passing the two-month extension.

"They're going to work expeditiously to come up with a long-term arrangement on the payroll tax, on unemployment, of course, and on the doc fix," Reid said.

"I hope this Congress has had a very good learning experience, especially those who are newer to this body," Reid said in a direct message to Tea-Party backed freshman members of the House, who have consistently opposed such deals. "Everything we do around here does not have to wind up in a fight. That isn't the way things need to be."

The bill passed today removes a wage cap of $18,350 that the Senate legislation had imposed to ensure that no one received more than two months of benefit from the payroll tax holiday. House Republicans said the cap created difficulties for payroll processors, and asked for it to be removed in the new bill, which instead creates an excise tax on "excise payroll tax relief" during the two-month extension.