US Congress Reach Deal on Payroll Tax Cut

Posted February 16th, 2012 at 4:00 am (UTC-5)
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A bipartisan group of U.S. lawmakers has reached an agreement on legislation to extend a payroll tax cut and unemployment benefits through the end of 2012.

Democratic Senator Max Baucus announced the deal late Wednesday after a long day of negotiations between House and Senate members. The measure is expected to be voted on later this week by both the House and Senate.

The lawmakers agreed to maintain a cut of about $20 per week from the payroll taxes of 160 million U.S. workers that would have expired at the end of February. Supporters of the payroll tax cut say it it will boost the economy by giving workers an extra $1,000 a year to spend.

The negotiators also agreed to a provision that prevents steep cuts in payments for doctors treating patients on Medicare, the federal government’s health insurance program for elderly Americans.

The payroll tax cut and other provisions would be partly offset by government auctions of $22 billion of radio spectrum to mobile wireless companies.

Leaders in the Republican-controlled House of Representatives dropped a demand earlier this week to offset the payroll tax cut with a reduction in spending, clearing the way for a final agreement. The Republicans decided to give up the demand so President Barack Obama and other Democrats could not use it against them as an election-year issue.