Congress passes payroll tax cut

Acting with striking bipartisanship, Congress on Friday passed a full-year extension of the payroll tax cut and renewed enhanced unemployment benefits, sending the bill on to the White House and delivering a major victory to President Obama.

Mr. Obama had made both the tax cut and the jobless benefits chief pillars of his economic plan, and he and fellow Democrats outmaneuvered Republicans and ended up shaping most of the package.

It passed on a 60-36 vote in the Senate, just minutes after it cleared the House on a 293-132 vote. In both cases, a coalition of Republicans and Democrats joined together to power the bill over the finish line.

“This agreement shows Congress can govern and Washington can work,” said Rep. Dave Camp, Michigan Republican and chairman of the Ways and Means Committee.

In a unique coincidence the votes came three years to the day after Mr. Obama signed his economic stimulus program into law, pumping hundreds of billions of dollars in tax cuts and spending into the economy but failing to hold unemployment down.

Now, with the economy still struggling, Mr. Obama fought hard to win yet another round of stimulus in the form of unemployment benefits and the continued tax cut.

The payroll tax holiday is worth $1,000 to the average American taxpayer this year, and both sides were loath to let it expire. But they had fought for months over how to offset the lost revenue, with Republicans insisting on spending cuts and Democrats demanding other tax increases instead.

In the end, they agreed not to pay for the tax cut at all, tacking the cost onto the deficit, which will now be $101 billion deeper in 2012.

“Why is it that the only time we can come together and reach an agreement, it’s in a manner that increases the deficit or explodes spending?” said Rep. Jeff Flake, Arizona Republican. “That’s enough to make the country cry for more partisanship.”

Republicans did insist on finding offsets for other parts of the package.

The legislation also includes full reimbursement rates for doctors who treat Medicare patients, and that $18 billion cost was covered by cuts to other parts of the health care budget — including several programs called for in Democrats’ health care overhaul law.

The $30 billion in additional unemployment benefits are not fully paid for, but Congress did tack on new fees for future federal workers’ pensions, and agreed to auction off rights to some parts of the communications spectrum to raise more money.

Senators and representatives from the Washington region voted against the legislation, arguing it was unfair to demand more of federal workers.

“This Congress is on the path to be the most anti-federal-worker Congress that I have served in,” said Rep. Steny H. Hoyer of Maryland, the second-ranking Democrat in the House.