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House Of Representatives, Senate Approve Payroll Tax Cut

Paige Brettingen |
February 17, 2012 | 9:25 a.m. PST

Executive Producer

House speaker John Boehner (Courtesy of Creative Commons)
House speaker John Boehner (Courtesy of Creative Commons)
After reaching an agreement Friday to give a payroll tax cut to millions of Americans while also extending unemployment benefits, the House of Representatives and Senate have sent the measure to President Obama for final approval.

The $143 billion plan will affect nearly 160 million American workers.  For those earning $50,000 a year, the tax cut would save $80 a month for them.  Unemployment benefits will continue for those who have been jobless for over six months. 

TIME reported that Republicans originally discouraged the plan in late December but changed their stance after pressure from conservative and GOP leaders:

  • "It will allow us to move forward on our agenda in the House," said freshman Rep. Tom Reed, R-N.Y., a reference to GOP proposals for paring federal regulations and shrinking government.

The agreement is being seen as milestone for bipartisan governing, CNN reported:

  • "Our founding fathers recognized that Washington would not always be united," said Rep. Dave Camp of Michigan, a top Republican involved in crafting the deal. "In their wisdom they knew that even divided government must still govern. And that is what we are doing here today -- governing and providing a solution to the very real problems Americans are facing in their daily lives."
  • "Today is a good day," declared House Minority Leader Nancy Pelosi, D-California. "This represents a victory for the middle class in our country."

According to CNN, the plan's benefit extensions for jobless will be funded by "broadband spectrum sales, increased pension contributions by new federal employees, and cuts to Medicare hospital and specialist fees that would not affect patients, according to the House Ways and Means Committee."

The funding has been met with some criticism- not just from Republicans, but Democrats who believe the plan "treats federal employees unfairly by requiring new government hires to contribute more to their pension," said CNN.

The plan's approval may also help bolster President Obama's re-election campaign as he delivers on the promises made in his State of the Union address last month.

"There's much more the American people need and expect from us — to help our businesses keep creating jobs, to help restore security for middle class families and to leave an economy that's built to last," the president said in a written statement.



 

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