–Senate Finance, House Ways And Means Chief Announce Accord
–Bill Will Extend Payroll Tax Cut Til End of Year Without Offsets

By John Shaw

WASHINGTON (MNI) – Senate Finance Committee Chairman Max Baucus
and House Ways and Means Committee Chairman Dave Camp announced early
Thursday that they had reached an agreement on the details of the plan
to extend the payroll tax cut until the end of the year.

Key negotiators haggled until the early hours of Thursday on the
details of the package, with most of the final hours of the talks
focused on the offsets in the bill.

Votes in the House and Senate could be pushed pack until the
weekend as rank-and-file members request time to study the package.

House Speaker John Boehner confirmed Wednesday that there was an
“agreement in principle” on a payroll tax cut extension package, but
added that a host of issues had 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.

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 extensions 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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