Congress votes to extend payroll tax cut for 160M workers
by By Michael Browning
By CHAD ABSHIRE
Americans are getting an election-year tax present.
Congress voted with rare speed and cooperation Friday to extend a Social Security payroll tax cut for 160 million workers and to renew unemployment benefits for millions more who haven’t seen a paycheck in six months.
With lawmakers’ ratings in the gutter, the legislation sped through both the House and Senate and was on its way to President Barack Obama, who saluted the quick passage.
U.S. Rep. Nick Rahall (D-W.Va.) voted for the extension when it came to the House, but did not fully support it.
Friday, he issued the following statement upon the House passage of the payroll tax cut extension by a 293-132 vote:
“There are a number of provisions I oppose in this measure, and the American people deserve better than a litany of intermittent stop-gap measures,” Rahall said. “Nevertheless, we have a responsibility to ensure that Medicare payments for health care providers and unemployment benefits for working families are not interrupted.
“This measure will avert a painful tax increase next month while ensuring there is no interference with the Social Security benefits that are supposed to be paid to retirees and workers; the Social Security trust funds are protected and preserved.”
Taxpayers have grown accustomed to the 2 percentage point cut in the payroll tax over the past year — around $80 a month for someone earning $50,000 a year — and the reduction now will be continued. So will jobless benefits averaging about $300 a week for the long-term unemployed, though the aid will be cut off sooner than before for many recipients.
While Rahall voted for it, U.S. Sen. Joe Manchin (also D-W.Va.) voted against it.
The senator issued the following statement about his voting against the 10-month payroll tax cut extension.
“I want to make sure that hardworking families have more money in their pockets - but this temporary policy is the absolute wrong way to do it because it cripples Social Security,” Manchin said. “I know that going back home and saying we voted for tax cuts is popular, but this is not a tax cut - this is a Social Security cut. Plain and simple.
“And knowing that we add 10,000 new 65 year-olds a day, and knowing that last year Social Security paid out more than it took in - how does that make any sense?”
The payroll tax cut extension voted on today will add more than $100 billion to our existing debt, a press release from Manchin’s office stated. There are no provisions to pay for the extension in the bill.
“West Virginians sent me here to vote for changes for the next generation, not a feel-good program that will last only 10 months, jeopardize Social Security and put our country another $100 billion deeper in debt,” Manchin said. “What we need - and what I’ve pushed for - is meaningful, fair tax reform, something our families will know that they can count on and that won’t jeopardize Social Security.
“This bill today does the opposite - and that is not a formula for success for this country.”
Both provisions, the extension of the payroll tax cut and the renewing of unemployment benefits, were to expire in less than two weeks,and had been extended only two months during a December congressional fight that seared Republicans. They were determined to avoid a repeat in campaign season.
The hard-fought — but ultimately bipartisan — measure contains the core of Obama’s jobs agenda and promises to pump more than $100 billion into the economy before Election Day. It hands the president a political victory as well, as Republicans called a tactical retreat in hopes of minimizing the gains for Obama and his Democratic allies on Capitol Hill.
The Senate approved the measure on a bipartisan 60-36 vote minutes after the House passed it on a sweeping 293-132 vote. Obama is expected to sign it shortly after returning from a West Coast fundraising swing.
The hope is that the dual measures will inject consumer demand and support a fragile recovery from the worst economic downturn since the Great Depression. The legislation would also protect doctors treating Medicare patients from a steep cut in their reimbursements under an outdated funding formula, a reduction that threatened to make it harder for seniors to find physicians.
The tax cuts, jobless coverage and higher doctors’ payments will all continue through the end of the year.
“The so-called experts will tell you that Social Security will be all right because we’ll backfill the reduced contributions with revenue from our general fund,” Manchin said. “But let me remind you that these are the same experts who have steered us to more than $15 trillion in debt - which is growing by $5 billion every business day. This is unsustainable.”
However, President Barack Obama was pleased with the bill’s passage.
“It is amazing what happens when Congress focuses on doing the right thing instead of just playing politics,” Obama said at an appearance at a Boeing factory in Everett, Wash. “This was a good example, and Congress should take pride in it.”
While a solid majority of Republicans in the House backed the measure, GOP opposition was stronger in the Senate, where Republicans voted against the bill by a 2-1 margin. Five Democrats and Sen. Bernie Sanders, (I-Vt.) opposed the measure, while 14 Republicans, including Minority Leader Mitch McConnell of Kentucky, backed it.
“I voted to extend the temporary payroll tax holiday because I didn’t want taxes going up next month on millions of Americans,” McConnell said. “I don’t think the American people should have to suffer any more than they already have as a result of this president’s failure to turn the economy around.”
Extending the 2-point cut in the 6.2 percent Social Security payroll tax would save a maximum of $2,200 for high-end earners.
The reduction in the Social Security payroll tax, which is deducted from workers’ paychecks, would cost $93 billion through 2022.
Of the $30 billion cost of the extended unemployment benefits, half would be paid for by government sales of parts of the nation’s broadcast airwaves, half by requiring federal workers hired after this year to contribute an additional 2.3 percent of their pay for their pensions, up from the current 0.8 percent.
Other costs would be made up by trimming Medicare reimbursements to health care providers to cover unpaid medical bills, cutting payments to hospitals that treat large numbers of poor patients and cutting a fund created in Obama’s health care overhaul for prevention efforts like battling smoking and obesity.
“Misinformed hyperbole aside, this is a responsible measure that keeps our promise to seniors and working families,” Rahall said.
The Associated Press contributed to this article.
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