Tuesday, February 14, 2012

Policy Update: Extension of payroll tax cut and extended unemployment benefits

by Bill McBride on 2/14/2012 07:25:00 PM

Back in January I listed several policies and agreements that were expected soon. Now it looks like the payroll tax cut and extended unemployment benefits will be extended through the end of the year.

From the LA Times: Lawmakers near deal to extend payroll tax break

One day after House GOP leaders announced they would abandon their insistence that a payroll tax break be paid for with spending cuts, negotiators are now close to a broader deal that would also extend unemployment benefits and ensure Medicare doctors don't see a pay cut, sources said.

... with Congress scheduled to adjourn Friday for a weeklong Presidents Day recess, all sides want to avoid the appearance of being on vacation while workers see a tax hike, jobless Americans go without benefits or doctors face a pay cut.

Under emerging contours of the deal, the payroll tax would not be offset, but budget cuts would be made to pay for the other two items: the costs of extending long-term unemployment benefits and ensuring doctors that provide Medicare services would not see a pay cut, the sources said.

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