–Package Expected To Be Approved By House-Senate Conference Panel
–Bill Will Extend Payroll Tax Cut Til End of Year Without Offsets
–Accord Also Extends UI Benefits And ‘Doc Fix’ With Offsets

By John Shaw

WASHINGTON (MNI) – The agreement to extend the payroll tax cut
until the end of the year is expected to be first approved by a
House-Senate conference committee and then go to the floor of the House
and Senate this week for votes.

House Speaker John Boehner confirmed Wednesday that there is an
“agreement in principle” on a payroll tax cut extension package, but
added that a host of issues will be nailed down throughout the day.

Boehner said the package would extend the payroll tax cut until the
end of the year and the $100 billion cost of the payroll tax cut
extension would not be offset.

Boehner said the other two items in the package would be offset: a
renewal of unemployment insurance benefits and an adjustment in the
Medicare reimbursement of doctors so that a 27% payment cut is
prevented.

These two items would cost about $50 billion and will be offset
through an assortment of spending reductions.

More specifically, about $20 billion would come from health
care savings. About $15 billion would be secured by auctioning a portion
of the spectrum used by TV broadcasters. About $15 billion would be
saved by requiring federal employees to contribute a larger amount to
their pensions.

Apart from the offsets, one of the final issues to be fine-tuned
is how the unemployment insurance program will be restructured.
Republicans are trying to reduce the maximum length of jobless benefits,
cutting them from 99 weeks to 63 weeks.

Once the package is fully completed, it will be considered by the
House-Senate conference committee that has been working on the various
issues package for weeks.

The conference committee is expected to approve the package as a
conference report which will give the bill certain procedural
protections as it is considered by the House and Senate. Most
critically, a conference committee report cannot be amended on the
floor of either chamber.

Congress is scheduled to leave at the end of the week for a
week-long recess and congressional leaders seem determined to pass the
package before departing Washington.

After weeks of partisan fighting and deadlock, the payroll package
has come together after House Republican leaders said Monday they would
be willing to extend last year’s payroll tax cut for the rest of this
year without requiring budget offsets.

The House-Senate conference committee has been working for several
weeks to draft a payroll tax cut package. Those talks focused on a $150
billion package to extend the payroll tax cut, extend unemployment
insurance benefits and prevent a deep cut in Medicare reimbursements for
doctors.

Congress passed a two-month extension of these programs which will
expire at the end of February. Both President Obama and congressional
leaders have said they want to pass a one-year extension of these
programs, but the House-Senate talks stalled out over the offset package
and other policy matters such as an overhaul of the UI program.

** Market News International Washington Bureau: (202) 371-2121 **

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