US Congress Nears Final Deal on Payroll Tax Cut

Posted February 15th, 2012 at 2:00 am (UTC-5)
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U.S. lawmakers have reached a tentative agreement to extend a payroll tax cut and unemployment benefits through the end of 2012.

A bipartisan negotiating panel of House and Senate lawmakers struck a deal Tuesday that would maintain a cut of about $20 per week from the payroll taxes of 160 million U.S. workers. The tax cut, which would have expired at the end of February, would add about $100 billion to the federal deficit.

The panel also agreed to reduce the amount of time jobless workers can receive benefits from 99 weeks to 73 weeks.

Negotiators are expected to finalize the compromise on Wednesday, and send it to the Republican-controlled House of Representatives for a vote possibly by week's end.

Earlier Tuesday, U.S. President Barack Obama called on Congress to reach an agreement on extending the payroll tax and unemployment benefits. The president said the last thing the improving U.S. economy needs is for “Washington to stand in the way of America's comeback.”

“We've got to keep on making sure that the American people's voices keep breaking through until this is absolutely, finally, completely done. Until you see me sign this thing, you gotta keep on speaking up.”

The tentative agreement reached Tuesday came the day after House Republican leaders dropped their demand to offset the payroll tax cut with a reduction in spending.

The deal also includes a provision that avoids steep cuts in payments for doctors treating patients on Medicare, the federal government's health insurance program for elderly Americans.