Deal Reached on Payroll Tax Cut Extension, Federal Workers Take a Hit

At 12:30 this morning, congressional negotiators announced they'd finally reached a deal on must-pass legislation set to expire in days—the payroll tax cut, unemployment insurance, and averting a steep cut to payments to Medicare providers.

The bill extends unemployment benefits through the end of 2012, but by the end of the year, it will reduce the number of weeks of unemployment eligibility to 63 weeks in states with moderate jobless rates and 73 weeks for those with the highest unemployment. Republican efforts to force beneficiaries into high school degree equivalency programs were turned back, though they did win a provision to bar people receiving welfare from using their electronic benefits cards to get cash from ATMs in liquor stores, strip clubs and casinos.

Despite the hissy fits of many in the GOP caucus House Speaker Boehner's capitulation on extending the payroll tax cut with no budget offset is the cornerstone of the deal. Nonetheless, the Democrats did not prevail on their preferred pay-fors, which was using the unspent Overseas Contingency Operation (OCO) funds from troop withdrawals Iraq and Afghanistan, money which the CBO counts as part of the budget, as the offset. Republicans balked, andDemocrats gave in.

The pay-fors now include adjustments to the federal retiree pensions formula, requiring new hires to pay more into their pension plans, shielding current federal workers from the hike. They'll raise $15 billion from a spectrum auction of wireless bandwidth. The plan also includes $5 billion from a new health care fund created by the Affordable Care Act focused on prevention, and additional reimbursement cuts to some Medicare and Medicaid providers. Democrats stress that they "stopped Republicans efforts to cut benefits for Medicare beneficiaries and to undermine health coverage for millions of Americans.”

The votes on the bill are expected tomorrow, before Congress recesses for a week for Presidents' day. Because it is a conference report, it can't be amended.

Daily Kos / By Joan McCarter | Sourced from

Posted at February 16, 2012, 7:20am

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