Friday, December 30, 2011

Extension of UI and Payroll Tax Cut Approved

Last week, congressional leaders in the U.S. House of Representatives, led by Speaker John Boehner (R-OH), agreed to accept a temporary two month extension of the expiring Emergency Unemployment Compensation Act (EUC08) program and Social Security payroll tax cut. Passage came swiftly in both the House and Senate last Friday morning as the compromise legislation was passed in both Chambers by voice vote.

In announcing the agreement, House Speaker John Boehner said Thursday, “Senator Reid and I have reached an agreement that will ensure taxes do not increase for working families on January 1 while ensuring that a complex new reporting burden is not unintentionally imposed on small-business job creators.”

Senate Majority Leader Harry Reid (D-NV) said Thursday evening he was “grateful that the voices of reason have prevailed,” and added that “I look forward to appointing members of my caucus to continue negotiations toward a year-long agreement. Two months is not a long time, and I expect the negotiators to work expeditiously to forge yearlong extensions of these critical policies.”

The House Majority, which rejected a similar compromise earlier last week, came under increasing political pressure over the week – much of it from its own party – to accept the two-month extension that already passed the Senate. It was reported House Speaker Boehner was determined to settle the issue and announced the decision on a conference call to House Members, ending a partisan fight that threatened to keep Congress and President Obama in town through Christmas.

When Congress returns, attention will turn to the conference committee assigned to hammer out a deal between the two chambers. But the differences remain large over how to pay for the deal with Republicans looking to areas such as freezing wages of federal workers and Democrats still considering increasing taxes on millionaires.

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