Payroll-tax cut extended, but debate isn't over - The Seattle Times

WASHINGTON — Congress on Friday quickly and quietly approved a two-month extension of the Social Security payroll-tax cut, ending a week of rancor and ensuring that more than 160 million people will avoid a 2 percentage-point increase next year.

The legislative day began at 9:30 a.m., when Senate Majority Leader Harry Reid addressed the presiding officer, Sen. Mark Warner, D-Va., to ask for unanimous consent on the measure. Without objection, it was so ordered, and, a minute after Reid began speaking, the gavel was down and the Senate — void of the other 98 senators — recessed.

The action next moved to the House, where Speaker John Boehner, in a rare pro forma appearance in the chair, presided over passage of the bill after a prayer and Pledge of Allegiance, a roughly five-minute process.

President Obama signed the bill into law, praised Congress, and then headed to Hawaii for the holidays.

The package — a major victory for Obama and a setback for House Republicans — will ensure that the average employee will avoid paying $80 a month more in Social Security taxes beginning Jan. 1. The rate for employees will remain at the 2011 level of 4.2 percent.

Negotiators from each chamber are expected to convene in early January to pursue a compromise for an extension that covers all of 2012.

There are three major areas of disagreement:

• Paying for the breaks. Democrats, including Obama, wanted a surtax on millionaires. The Senate, on largely party-line votes, rejected that idea. House Republicans countered with a series of proposals that Democrats found unpalatable, including a federal pay freeze and a reduction in the federal workforce.

• Revamping the unemployment-benefits system. House Republicans want to reduce the maximum number of benefit weeks from 99 to 59 and make other changes. Democrats have resisted.

• Protecting the Social Security Trust Fund. Another year of payroll-tax breaks means less revenue for the trust fund, a serious concern for many in both parties. Supporters of the tax break insist there's no risk to the fund because the Treasury will make up lost revenue.