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September 21, 2014

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House, Senate pass payroll-tax cut extension

WASHINGTON -- After months of wrangling, the payroll tax cut standoff ended today, with the U.S. Senate and House both unanimously adopting a two-month extension of unemployment benefits and reduced paycheck deductions.

No lawmakers showed up in the House to object to the swift adoption of the short-term measure despite fears someone would step in to derail the process at the last minute.

Anyone with lingering objections held their peace, and the House adopted the basic bipartisan bill they had spent the last week railing against, bringing what seemed like an unresolvable stalemate to a pre-Christmas close.

“I hope this Congress has had a very good learning experience. Especially those who are newer to this body,” Sen. Harry Reid said moments before the House vote. “Everything we do around here doesn’t have to end up in a fight...Legislation is the art of compromise, consensus building — not trying to push a way through on issues where you don’t have the support of the American people.”

It was a lecture from Congress (and Nevada’s) most high-ranking Democrat directed at Republican freshmen like Nevada Reps. Joe Heck and Mark Amodei, both of whom refused to support the short-term bipartisan extension that passed the Senate 89 to 10.

Amodei had called a two-month bill “a can-kick of Olympic proportions,” while Heck called it “utterly ridiculous” -- both were angling for a one-year extension, voting only to appoint House Republican conferees to a committee to work out a deal in the last days of 2011.

As part of the final tradeoff to get the short-term legislation passed, Reid appointed Senate Democratic members to the conference committee this morning -- but the group isn’t expected to meet until the new year.

Reid’s conferees are Sens. Max Baucus of Montana, the Finance committee chair who is Reid’s go-to favorite for all things fiscal; Ben Cardin of Maryland, who Reid says is second-to-none on advocating for federal employees; Jack Reed of Rhode Island, who Reid puts at the top of the Senate in terms of protecting the unemployed; and Bob Casey of Pennsylvania, who chairs the Joint Economic Committee and was the sponsor of the Democrats’ version.

Senate Republicans -- the majority of whom also supported the two-month compromise from the get-go but disagreed with Democrats over how to pay for a longer-term bill -- have not selected their conferees, but as official sponsor of the Republican alternative, Nevada Sen. Dean Heller seems a logical choice for the roster.

House Democrats appointed five from their ranks Friday: Reps. Henry Waxman and Xavier Becerra of California, Rep. Chris Van Hollen of Maryland, Rep. Sander Levin of Michigan and Rep. Allyson Schwartz of Pennsylvania.

Boehner selected a crew of eight from the House Republican caucus earlier in the week: Kevin Brady of Texas, Dave Camp of Michigan, Renee Ellmers of North Carolina, Nan Hayworth of New York, Tom Price of Georgia, Tom Reed of New York, Fred Upton of Michigan and Greg Walden of Oregon. Democrats have been quick to point out that five of the eight have made disparaging comments about payroll tax reductions in the past.

Payroll tax cuts have to be paid for in these extensions, long or short, because the tax goes directly into the Social Security Trust -- so a lower payroll tax means less money is going in. The discussion of pay-fors and offsets is focused on how best to replenish the funds that aren’t going into the trust when the payroll tax rate is lowered from 6.2 to 4.2 percent (as it has been since last December), so that Social Security experiences no direct effect from the change.

This is also the first time lawmakers have applied the pay-for standard to unemployment insurance as well; normally, the program has been extended as an emergency aid to the economy, which under statute, means lawmakers can authorize the spending without immediately offsetting the cost.

But these are the sort of issues that stymie lawmakers of opposite parties, especially when they sit on a committee. Not so long ago, five of the lawmakers who have been appointed to the payroll tax conference committee were sitting across the table from each other in Reid’s deficit-reduction super committee. While the super committee’s ends were different -- debt reduction vs. unemployment and payroll -- the means to that end, revenues and cuts, are exactly what the lawmakers on the new conference committee will have to agree on to conclude a long-term bill.

As became apparent when the super committee ground to a halt with no product, these are not easy positions to reconcile -- unless the experience of this most recent stalemate has so affected members of Congress that they are willing to turn over a new leaf.

“From our perspective, this is a new day,” Reid said this morning.

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