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President signs payroll tax cut extension

By Andrew Taylor

Associated Press

LAST UPDATED: 10:09 a.m. HST, Dec 23, 2011

WASHINGTON >> 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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KeithHaugen wrote:
Thank you,Mr. President.
on December 22,2011 | 09:05PM
Pacej001 wrote:
For what? Depleting the SS "trust fund" by another $160billion? For stimulating the economy by $20 dollars a paycheck? I don't see how that passes any form of common sense test, especially given the failure of the previous, much larger stimulus efforts.------- And the Democrats earlier idea of somehow "paying" for the SS payroll tax reduction by a tax on the wealthy. Would the revenue from that tax have gone into the SS trust fund? NO. (A Silly, rhetorical question since the trust fund, actually a pile of IOUs, doesn't exists) It would go into the general fund where it would be eaten alive by our $1.5 trillion annual deficit AND the SS "trust fund" would STILL be depleted by the amount of the payroll tax reduction. So, what you're thanking Mr. President for amounts to his borrowing from future Social Security recipients and pretending to give that borrowed money away to working Americans for no meaningful economic purpose.
on December 23,2011 | 04:54AM
KeithHaugen wrote:
I tried to explain it to you, but my follow-up post was "sent for approval." So it's up to the censor whether or not you'll see why I said "thank you" to our President.
on December 23,2011 | 06:08AM
nodaddynotthebelt wrote:
These GOP is using the current extension for their own political purpose and it is us, the people, who may end up losing out on benefits that we need. Yes, we need to cut spending but we still need to provide services. Yes, the Democrats are spending money we don't have but the GOP's solution is to simply cut spending where we really can't at this time.
on December 22,2011 | 09:25PM
whateva-works wrote:
It is written it is done.
on December 22,2011 | 11:53PM
Locokane wrote:
We don't need two political parties which are often clashing and disregard what the public needs. Let's disband the Republican party and go with one party. Maybe public interest will be served vice private interest or political party lines.
on December 23,2011 | 03:03AM
Pacej001 wrote:
Great idea. And then, with one enlightened party, maybe we could all get nice brown shirts to wear.
on December 23,2011 | 04:38AM
lee1957 wrote:
Great idea, it's worked well in Hawaii, works pretty good in Mexico too.
on December 23,2011 | 08:26AM
SteveToo wrote:
Don't forget all the former Communist nations of Europe and the New World.
on December 23,2011 | 02:51PM
Changalang wrote:
Spanked. Congrats to the President for a big win on this one. Obama gave one speech reading letters from people who this would affect most and the GOP caved. Those TEA party reps just voted unanimously to let the two months stand. Kind of hypocritical to make all this trouble and than cry Uncle Obama when one speech is given. LOL. Mr. President deserves a great vacation with us. It reminds me of The Matrix. Obama is Neo "The One", and it is clear who the once all powerful Matrix "agents" fear to do combat with.
on December 23,2011 | 05:29AM
KeithHaugen wrote:
Right on, Changalang.
on December 23,2011 | 06:09AM
Pacej001 wrote:
Gee, thanks for straightening that out. All this time I was thinking, by his actions, policies, and ideology, that he was something more like the Manchurian Candidate.
on December 23,2011 | 06:32AM
Changalang wrote:
Obama creates a cult of personality. He is a campaign animal. When he uses his far exceeding campaign skills to push policy as President; he is a political juggernaut. Think about it. The House had the biggest replacement seat take over in recent history in November 2010, and Obama has his boot on Boehner's throat with Mitch from the Senate kicking the House leader when he is down. Does that seem like the act of a Manchurian puppet to you? To others, he looks like The One. America has changed, and it took Obama to do it. Think of it as a test of your personal paradigm of patriotism through tolerance. Patriotism should not be a symptom of convenience. Bush was my President. Obama IS my President. Americanism is much easier to live than partisanship that produces nothing but bad feelings between our own.
on December 23,2011 | 06:50AM
Pacej001 wrote:
Obama's appeal is emotional, not rational, for his followers, those who would describe him, or anyone, as The One". There's no good argument that he had the experience, qualifications, or temperament for the presidency and I don't see that he's done anything to alter that perception in the last three years. In fact, he's reinforced it. The man was elected based on his personal appeal and emotionalism. These things have their place, but they're not enough alone to justify electing a person to the presidency. -------As to this SS tax flap, the Republicans did that to themselves, not Obama. If the Rs in the Senate had held out for a one year extension of the payroll tax cut, the shoe would have been on the other foot. Instead we have this foolish, unworkable 60 day thing. And for what? Minimal stimulative effect and further decline of the SS trust fund. -----While you may see some positive change in the country brought about Obama, I sure can't. What I see is extreme partisanship, his resorting to class warfare, his failure to address our massive fiscal problem, a fundamental lack of presidential leadership on issue after issue, an FDR-like hostility to private enterprise and innovation, and worst of all, his ham handed creation of yet another entitlement we can't afford and that the majority hate. ----- My "personal paridigm ..for tolerance" is just fine, but I do have a low willingness to accept weak, ineffective, divisive, ideologically-driven leadership when we desperately need the man to rise to the occasion. Instead, of that we get "a campaign animal". (Can't make sense of "Patriotism ... convenience" or the concept that disagreement/partisanship is contrary to "Americanism".
on December 23,2011 | 07:56AM
Changalang wrote:
The emotional response to fellow Americans has mass appeal and power. The masses are the majority. Majority rules. Feeling as informed elite is counter-productive and the crux of weakness in the Hawaii GOP in particular, and the crumbling of the party nationally. Should the House have won on the principle that 1 year vs. 2 months would be better for Americans? Yes. Were the right on principle and still lost via public pressure? A bigger and resounding Yes. Only "The One" could so soundly defeat the GOP agents, when they were right on principle. Being a patriot in the new America means living the fact that you may be right, and accepting that it is inconsequential to the greater good as viewed through the perspective of the masses. More Conservatives are waking up into their own nightmare that the war is already won by the left. That must really suck. Adapt , or die. "It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change." (C. Darwin) Hope and Change is only evolving into a superior political platform as proven by this example.
on December 23,2011 | 09:11AM
Pacej001 wrote:
Now you're either yanking my chain or the Christmas party got started early. If you're serious, I'm saddened. The left, not only hasn't won, but it's a dead man walking, a mass delusion built around blind faith in endless government spending. The CBO charts tell the tale. Following American liberalism to its logical, mathematical conclusion will mean national insolvency or as the CBO analysts say, a point where our economy basically ceases to function due to unmanageable national debt. So, the new agey stuff is going to yield to simple math, then no more left.
on December 23,2011 | 12:05PM
Changalang wrote:
I think you are the one dipping into the spiked punch. Take a look at usdebtclock(dot)org. The unfunded mandates created by the entitlement policies of the "greatest generation" saddled the U.S. to its insolvency fate long before Obama, and both Bushes for that matter. SS, Prescription drug liability, and Medicare total about $117,000,000,000,000. That is over $1,000,000 per U.S. taxpayer. We have been technically bankrupt for decades. The liberal solution of mutually assured global economic destruction is our country's only hope of never having to pay back the unfunded liabilities. Our dollar is the whole world's problem. That is the only way we get to keep living the lie. Your not in Kansas anymore, Dorothy.
on December 23,2011 | 01:12PM
Pacej001 wrote:
Cant reply below your comment. Entitlements, for the most part, are a creation of the New Deal and Great Society---democrats! I think Obama is a democrat, too?! Right? And I seem to remember a completely new entitlement, Obamacare. No one knows how much that will add to your debt clock. Geo Bush's worst mistake, dollar wise, was a bottomless drug benefit, a similar thing produced by a democrat congress would only have been worse. ---- The rest of what you say is pure genius (because I agree with you). Merry xmas.
on December 23,2011 | 04:37PM
KeithHaugen wrote:
Thank you, Mr.President, for standing up to Boehner and his little following of wannabes who are representing the wealthy 1 percent instead of the masses of Americans. And welcome home!.
on December 23,2011 | 06:05AM
Newsizs wrote:
I hope some of those disgruntled House members get together and put together some legislation requiring all lawmakers to finish their work, BEFORE they go on vacation. "Finish their work" means when the bill becomes a law. That way, the Senate can't pass their version of the bill and then leave town, forcing the House to accept the Senate's changes or end up being the scapegoat for letting tax cuts expire next week. How would you feel if your co-worker went on vacation and left a big project unfinished, and you had to finish it and do your own work, or look bad to your boss? Seems to me, the Senate's eye was on how to do the minimum amount of work so they could go on recess (they know how to work the system). There's no way a two-month extension is going to do anything meaningful to help the economy.
on December 23,2011 | 09:40AM
awahana wrote:
Republicans can suck my ****.
on December 23,2011 | 10:55AM
entrkn wrote:
This is the way things get done with this bunch one-way gop facists in Congress these days...
on December 23,2011 | 11:25AM
SteveToo wrote:
I"m on SS and wondering what the idiots in Congress are doing. Where is my money going to come from? Gotta raise taxes somewhere else I guess. I put money in for over 40 years and expect to keep getting my SS check each month. BTW I could have down w/o the small increase that everyone got for the following year. If SS is so broke how can they raise payments and at the same time reduce the amt going into the fund???????????????
on December 23,2011 | 02:49PM
808warriorfan wrote:
Way to go "Mr. Prez".....WELL DONE !!!!!
on December 23,2011 | 09:30PM
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