Tax Cut Survives: Congress Votes Holiday Approval

By: Andrew Taylor, Associated Press
By: Andrew Taylor, Associated Press

Washington, D.C. (AP) - Barely beating Santa's sleigh, Congress delivered a last-minute holiday tax-cut extension to 160 million American wage-earners on Friday, just when it looked like they and millions of unemployed workers were going to be left with coal in their stockings.

It was a major yearend political victory for President Barack Obama, a big slice of humble pie for House Republicans and a blow to House Speaker John Boehner, R-Ohio, who'll have an angry band of tea party lawmakers to deal with when Congress returns to Washington next month.

Back-to-back voice vote approvals of the two-month special measure by the Senate and House came in mere seconds with no debate, just days after House Republican leaders had insisted that reopening negotiations on a full-year bill was the only way to persuade them to prevent a tax increase on Jan. 1.

Obama immediately signed the bill into law.

"I said it was critical for Congress not to go home without preventing a tax increase on 160 million working Americans and I'm pleased to say that they got it done," a buoyant looking Obama said at the White House before dashing off for his delayed holiday vacation to his home state of Hawaii.

Actually most lawmakers were long gone. A token few showed up to make approval official.

The legislation buys time for talks early next year on how to finance the year-long extensions - negotiations that promise to be contentious, especially if Democrats continue to use Obama's jobs agenda to seek a political edge in the 2012 presidential and congressional campaigns.

The measure will keep in place a 2 percentage point cut in the Social Security payroll tax - worth about $20 a week for a typical worker making $50,000 a year - and prevent almost 2 million unemployed people from losing jobless benefits averaging $300 a week. Doctors will win a reprieve from a 27 percent cut in their Medicare payments, the product of a 1997 cut that Congress has been unable to permanently fix.

Republicans did claim a major victory, winning a provision that would require Obama to make a swift decision on whether to approve construction of the Canada-to-Texas Keystone XL oil pipeline, which could generate thousands of construction jobs. To stop construction, Obama, who had wanted to put the decision off until after the 2012 election, would have to declare it was not in the nation's interest.

On Friday, an expressionless Boehner read from a piece of paper before him, gaveled the House's last session of the year closed and stepped off the podium on the Democratic side.

Boehner had been open to the Senate's version of the legislation a week ago, even though it would have punted the issue into February and given Democrats a proven political issue. But tea party forces and some in his own leadership revolted, insisting on picking a holiday fight with Democrats, and Boehner felt no choice but to go along.

The battle turned out to be a loser for House Republicans, earning the ire of swing voters and many in the GOP establishment, but when Boehner capitulated on Thursday he then felt the lash from hard-core conservatives.

"Even though there is plenty of evidence this is a bad deal for America ... the House has caved yet again to the president and Senate Democrats," said Rep. Tim Huelskamp, R-Kan.

Meanwhile, Democratic Senate leader Harry Reid of Nevada did a victory lap, twisting the knife into tea party Republicans.

"I hope this Congress has had a very good learning experience, especially those who are newer to this body," Reid said. "Everything we do around here does not have to wind up in a fight."

A full-year extension of the tax cut had been embraced by virtually every lawmaker in both the House and Senate but had been derailed in a quarrel over demands by House Republicans. Senate leaders of both parties had tried to barter their own yearlong agreement a week ago but failed, instead agreeing upon a 60-day measure to buy time for talks next year.

House GOP arguments about the legislative process and what the "uncertainty" of a two-month extension would mean for businesses seemed lame to many people when compared to the consequences of raising taxes and cutting off jobless benefits in the middle of the holiday season, and Obama and the Democrats were hard on the offensive. House Republicans finally resorted to a technical fix and the fact that Reid would name negotiators on the GOP's yearlong measure as reasons to reverse course and embrace the Senate measure.

Friday's House and Senate sessions were remarkable. Both chambers had essentially recessed for the year, but leaders in both parties orchestrated passage of the short-term agreement under debate rules that would allow any individual member of Congress to derail the pact, at least for a time. None did.

The developments were a clear win for Obama. The payroll tax cut was the centerpiece of his three-month, campaign-style drive for jobs legislation that seems to have contributed to an uptick in his poll numbers - and taken a toll on those of congressional Republicans.

The two-month version's $33 billion cost will be covered by a 0.1 percentage point increase on guarantee fees on new home loans backed by mortgage giants Fannie Mae, Freddie Mac and Ginnie Mae - at a likely cost of about $17 a month for a homeowner with a $200,000 mortgage.

The top Senate Republican, Mitch McConnell of Kentucky, was a driving force behind the final agreement, imploring Boehner to accept the deal that McConnell and Reid had struck last week and passed with overwhelming support in both parties.

Even though GOP leaders including House Majority Leader Eric Cantor, R-Va., promised that the two sides could quickly iron out their differences, the truth is that it will take intense talks to figure out both the spending cuts and fee increases required to finance the longer measure.

Republicans want to shorten the maximum length of unemployment benefits from 99 to 79 weeks, freeze the pay of federal civilian workers and make federal workers contribute more into their pensions - all ideas considered by the failed debt "supercommittee" this fall. The main provisions of the yearlong House measure cost about $200 billion, and the final version could cost more.

Reid signaled a hard line for the House-Senate talks by assigning Sen. Ben Cardin, D-Md. - a strong advocate for federal workers - to the Democratic negotiating team.

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  • by Anon on Dec 26, 2011 at 03:27 PM
    "Master Romney"? Not suprised that this title was created by WCTV's resident vitriolic race baiter- "Gerry Gerbil".
    • reply
      by Gerry on Dec 26, 2011 at 07:22 PM in reply to Anon
      Please. Can you not even copy? Master Reginald or Master Reginald Romney.
  • by Gerry Location: Tallahassee on Dec 26, 2011 at 05:47 AM
    When Obama or his wife or children travel, hasn't the money they spend been appropriated by Congress? Is any Republican so squirrelly as to think somebody will vote against Obama because of his 2 week Hawaiian vacation? Independents say "I'm voting for Master Reginald Romney because Obama travels too much." This issue is winner for Republicans. Lots of independents are very concerned about Obama going to Hawaii.
    • reply
      by Steve Florida native/resident, Not in Marietta, Don't rewrite history on Dec 27, 2011 at 08:20 PM in reply to Gerry
      When the lame-duck William Jefferson Blithe Clinton was leaving the big house, he and his wife stripped out the furniture they desired and scurried into the night. Rednecks with U-Hauls! You may need to nexus/lexus or google that! You may also recall they damaged and reduced to junk, thousands of desktop computers with the letter "W" removed with abandon. Take another Tylenol PM, and just let it go. Thanx.
  • by Gerry Location: Tallahassee on Dec 26, 2011 at 05:41 AM
    when Obama spent his first Xmas as Prez, he was 48 years old and had daughters 13 and 10. When Reagan spent his first Xmas as Prez, he was 70, and his youngest child was 23.
    • reply
      by Gerry on Dec 26, 2011 at 04:53 PM in reply to Gerry
      Actually, Obama's daughters were 11 and 8 at Xmastime, 2009.
      • reply
        by GV on Dec 27, 2011 at 05:00 AM in reply to Gerry
  • by Gerry Location: Tallahassee on Dec 25, 2011 at 03:18 PM
    Master Reginald Romney, the great populist, wants everybody to have the same opportunities in life he had. The opportunities that go with your father being head of American Motors and Governor of Michigan for 6 years. Master Reginald called the affluent Detroit suburb of Bloomfield Hills home and attended private schools after 6th grade. Master Reginald spent many days and nights wondering where his next meal would come from. His face bespeaks his hardscrabble life. Master Reginald's campaign slogan will be "Every man a king." Get it? Everyman? Now do you get it?
    • reply
      by Anonymous on Dec 25, 2011 at 10:53 PM in reply to Gerry
      Doesn't Obama's kids attend private school? It's obvious why you fear Romney, Gerry, because he's probably going to be the next president. Get used to it.
      • reply
        by Gerry on Dec 26, 2011 at 05:30 AM in reply to Anonymous
        It's kinda hard to figure out whether I'm dealing with somebody ignorant or dishonest or both. Since you fail to distinguish yourself from many others, I'll assume you are intentionally dishonest. The relevant comparison would be the kind of upbringing Obama had as compared to the kind of upbringing Master Reginald Romney had, not to compare Obama's children with Romney. Does anybody really think Obama had the kind of upbring Romney had? Master Reginald's father was an automobile executive, head of American Motors, and, at the moment Master Reginald graduated from high school, Governor of Michigan. Does anybody think Master Reginald is a self-made man?
        • reply
          by Reagan Republican on Dec 26, 2011 at 01:48 PM in reply to Gerry
          @ Gerry Is this all you got? You are saying Romney shouldn't be President because he went to private schools for an education and his father could provide for all their needs and wants in the household. I guess you are saying Sasha and Malia better just give up now towards being successful women in the business world or politics because of your attitude towards certain Americans who have great parents. Pres. Obama is a very good husband and father to his children! Chelsea Clinton, according to Gerry, you better not aspire to walk in the political path of your successful and intelligent mother and father because of your "upbringing." Get real Gerry....
        • reply
          by Gerry on Dec 26, 2011 at 05:26 PM in reply to Gerry
          @RR I'm saying Master Reginald was to the manor born. It must have taken great courage for him to become a Republican. This is not true of Perry, Bachmann, Gingrich, Cain. Whatever you think of Perry, Bachmann, Gingrich, Cain, they did not start out on 2nd base. Master Reginald did. If you want to vote for someone born into a higher socio-economic class than you were, Master Reginald is your man. Master Reginald has residences in MA, NH, and CA.
        • reply
          by Reagan Republican on Dec 26, 2011 at 07:44 PM in reply to Gerry
          @ Gerry Why is it your opinion that someone's socio-economic class be a criteria on which a decision should be based for his or her ability to be President of the United States?
        • reply
          by Gerry on Dec 26, 2011 at 08:57 PM in reply to Gerry
          @RR Is this all you got? Speaking of picking nits, isn't that an odd question coming from someone who recently posted about the cost of Obama's vacation?
        • reply
          by Reagan Republican on Dec 26, 2011 at 09:48 PM in reply to Gerry
          @ Gerry Why did you answer my question with a question thereby allowing yourself not to answer my question? Also, Mitt Romney is not the President and he is not spending a reported $4 million dollars of taxpayer's money to spend the holidays in Hawaii. Can you comprehend the distinction between spending taxpayer's money and spending one's own personal money?
      • reply
        by Conservative democrat on Dec 26, 2011 at 06:56 AM in reply to Anonymous
        if your not you should be a stand up comedian!!!!!!!
  • by Larry on Dec 25, 2011 at 02:02 PM
    To all the Obama haters who post, stop hating so much. Release yourselves of bitterness and hate. You'll feel a release and so much better. Then, enjoy life and be nice.
    • reply
      by Anon on Dec 25, 2011 at 03:36 PM in reply to Larry
      That works BOTH ways brother.
    • reply
      by Buddy on Dec 26, 2011 at 07:30 AM in reply to Larry
      Another Liberal that lives for his Chief "Propagandist" to continue to fill your pea brain with HOPE AND CHANGE. Obama is a Failure and someone will have to clean up his DOOM AND STUPIDITY.
    • reply
      by Anonymous on Dec 27, 2011 at 07:03 AM in reply to Larry
      I don't hate the man, I simply dislike his political stance and his thought process. His actions have been lousy for the American people.
  • by chris Location: tally on Dec 24, 2011 at 08:28 PM
    yep We are now living on "Change". Pocket change thanks to obummer and the idiots that voted for him
    • reply
      by conservative democrat on Dec 25, 2011 at 02:07 PM in reply to chris
      next year you can vote in the republicans who will take your change,TEA PARTY REPUBLICAN WAY!!
  • by Reagan Republican on Dec 24, 2011 at 07:44 PM
    Pres. Reagan and his wife Nancy would stay at the White House during Christmas to make it easier for staff, Secret Service Agents, and others to schedule time off to spend with their families. Also, Pres. Obama's Christmas gift on Friday was an additional $113 million dollars of emergency aid funding (on top of the $870 million) dollars to the Horn of Africa. America needs this money to help our citizens, especially during Christmas!!!! I guess Pres. Obama thinks money grows on trees...
  • by Anonymous on Dec 24, 2011 at 06:28 PM
    Maybe Obama will take his unconditional sacntimonious supporter "Gerry" on his next well deserved multi-million dollar tax payer funded vacation. Remember sheep- only politicians with a D next to their name should live lavishly on the taxpayer's dime. Isn't that right Sir Gerry?
  • by Ralphie on Dec 24, 2011 at 01:54 PM
    You righties need to back off. The fourth greatest president in American history deserves a $4 million vacation at the taxpayers expense.
  • by Low Taxes Location: Golden Eagle on Dec 24, 2011 at 01:14 PM
    The middle class don't need a tax break as they get all the child tax credits, Pell Grants, etc. The upper class, (job creators), need the tax break because we pay most of the taxes. If we paid no taxes at all then we can pass on our wealth to the middle class and poor in the form of jobs and with our purchases.
    • reply
      by conservative democrat on Dec 26, 2011 at 06:58 AM in reply to Low Taxes
      WHERE ARE THE JOBS???? you and the tea party say they create jobs, but yet they are claiming record profits , but no jobs????
      • reply
        by Working Poor Jobs don't count on Dec 26, 2011 at 07:45 AM in reply to conservative democrat
        Yea, and the jobs they are creating don't pay enough or have no benefits so their employees still need to get welfare in the form of food stamps and medicaid just to survive.
      • reply
        by Anonymous on Dec 26, 2011 at 06:59 PM in reply to conservative democrat
        Rich people buy things. Cars, boats, houses, etc. Somebody has to build those cars, boats, houses, etc. Somebody has to maintain those cars, boats, houses, etc. Those cars, houses, boats, etc. require fuel, electricity, paint, tires, glass, etc. These items are either sold in stores by a store employee or on the internet and delivered by a carrier service. Poor people don't buy cars, houses, boats, etc, therefore there is no maintenance, no fuel, no sellers, no delivery, etc. There are the jobs. Do you get it now?
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