Congress approves payroll deal

Updated
 

A week ago, the payroll tax cut looked to be in pretty big trouble. A half-hour ago, the policy passed both chambers and headed for the White House.

Congress passed a $150 billion economic package Friday, extending for the rest of the year a payroll tax holiday for 160 million workers and unemployment benefits for millions of others.

On a 293-132 vote, a bipartisan House coalition supported the compromise plan to keep giving workers a small amount of extra cash with each paycheck while also providing a continued cushion for the unemployed.

Shortly afterward, the Senate voted 60 to 36 to approve the plan, which now goes to President Obama to be signed into law.

Here’s the roll call for the 293-132 vote in the House. Note that 91 House Republicans broke ranks to oppose the bill – that sounds like a lot, but it was fewer than expected – while 41 House Democrats also rejected the agreement. It produced an unusual final tally: of the 293 “yea” votes, Dems narrowly outnumbered Republicans, 147 to 146.

It will almost certainly be the only major bill in this Congress that passes the GOP-led House with more Democratic votes than Republican votes. It also sends an unforeseen message to the GOP’s far-right rank-and-file members: once in a while, when Boehner, Cantor & Co. really want something, they’re prepared to rely on Dems, even if Tea Partiers don’t like it.

The Senate vote proved to be even more interesting. Republican leaders knew the package had to pass today, but as of this morning, it looked like 60 votes were not yet in place. (Because the GOP filibusters literally every measure of any significance, it is no longer possible to pass legislation with “only” a majority of the Senate.)

So, Senate Republican leaders make a curious announcement mid-morning: there would be no filibuster of the payroll deal. The GOP opposed the package, but not enough to deny it an up-or-down vote.

In the end, it didn’t matter – it passed with 60 votes anyway. When the gavel came down, 30 Republicans and 6 Democrats opposed the bill.

President Obama will sign the package into law.

As for what’s in the bill, here’s a refresher for those just joining us:

* Payroll tax cut: The deal extends a 2% cut to the Social Security payroll tax, at a cost of about $100 billion, giving the typical American worker roughly $1,000 more in take-home pay this year. How will this be paid for? It won’t be – GOP leaders, in a concession that made the larger deal possible, agreed this week that the cost of the cut need not be offset at all. (An equivalent to the amount that would have been received from the payroll tax will be transferred into the Social Security trust fund from the general fund.)

* UI and the “doc fix”: The other two major elements of the larger package were also approved, including an extension of unemployment benefits. As part of the compromise, however, Republicans were able to reduce maximum eligibility from 99 weeks to 73 weeks.

* Financing: To pay for the non-payroll provisions, lawmakers agreed to sell radio spectrum licenses, as well as forcing new federal workers to pay more into their government pensions. Dems gave up on the millionaire/billionaire surtax fairly early in the process.

* Extraneous measures: Republicans wanted new education requirements for beneficiaries, but didn’t get them. The GOP is not leaving completely empty-handed, though – states will be allowed to conduct drug tests on those who lost their jobs for failing a drug test (states can already do this) and must prevent welfare aid from being spent at casinos, liquor stores, or strip clubs (states have already done this).

Cutting through the clutter, the bottom line is pretty straightforward: Democrats and economists didn’t want the economy to take a hit from an expiring payroll break, and once Republicans caved on the key point, a deal came together.

Congress approves payroll deal

Updated