Congress approves payroll tax bill

The House on Friday morning approved a bill extending the payroll tax holiday and unemployment insurance for two months, and also preventing a planned cut to reimbursements for Medicare physicians.

Rep. Jo Ann Emerson (R-Mo.) asked for unanimous consent, which was declared approved by House Speaker John Boehner (R-Ohio). The bill is H.R. 3765.

House Minority Whip Steny Hoyer (D-Md.), who tried unsuccessfully to force a vote on the Senate bill earlier in the week, spoke briefly before the bill was accepted to thank Republicans for finally agreeing to the extension.

"I know that the American people are pleased that we have come together to agree on this extension to give certainty and peace of mind to 160 million Americans who are concerned about losing their tax cut, the 48 million seniors who are concerned about their Medicare and the 2.3 million people who are unemployed and seeking work who are fearful of losing their benefits," Hoyer said.

"I thank the Speaker, and I thank the gentlelady from Missouri," he said.

The bill was sent to the White House and signed into law by President Obama.

The quick House passage capped a disastrous public-relations week for House Republican leaders, who initially signaled support for the two-month extension agreed to in the Senate, then changed their minds after rank-and-file members said they opposed what could be a complicated patch for employers.

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The House on Tuesday rejected the Senate's two-month extension, and spent the rest of the week calling for Senate Democrats to return to Washington and find a way to approve a yearlong extension.

But by Thursday, signs were emerging that Democrats were winning the PR battle, in part because Senate Minority Leader Mitch McConnell (R-Ky.) broke with Boehner and called on the House to accept the Senate compromise.

Reporters and photographers swarmed Boehner as he strode back to his Capitol office suite after Friday's session, but the Speaker refused to answer any questions.  

"If I answered one question, it would be one too many," Boehner said.

With their political victory clear to all, Democrats were restrained on Tuesday, showing little interest in spiking the football on an agreement that extended a tax cut for just two months.

“This is a small win, but it’s a big win,” said Rep. John Dingell (D-Mich.), the longest-serving member of the House.

In a dig at the GOP, Dingell said he was hopeful the victory “was a sign of things to come” and offered some unsolicited advice to the House Republican rank and file.

“I’m hoping they’ll also learn to follow their leader, Mr. Boehner,” Dingell said.

Rep. Xavier Becerra (D-Calif.) credited President Obama, along with Americans who engaged on the issue in recent days to pressure Republicans to come to an agreement.

“A big cheer for a guy named Barack Obama, the president of the United States,” Becerra said.

The praise for Obama was notable for House Democrats, who have been among the most vocal Democratic critics of the president’s negotiating style during his three years in office.

McConnell on Thursday outlined the rough compromise that was struck between the House and Senate. Senate Democrats agreed to name conferees to meet with the House to work out a yearlong extension of the payroll tax holiday, and in return, the House would accept the two-month extension in the meantime.

Despite the heartburn the payroll fight caused Republican leaders, the bill in many ways represents a policy victory for Republicans, as it does not pay for the payroll tax extension through higher taxes, as Democrats had first proposed. It also includes language that requires the Obama administration to make a decision on the Keystone oil sands pipeline extension within 60 days, something President Obama initially said he would veto.

The bill gives a nod to Republican concerns that a two-month payroll tax extension would create a new accounting burden for companies. Republicans said they were worried that a two-month extension would complicate the effort of employers to implement the tax holiday with their employees.

Under the new bill, employers would not have to manage the transition from a two-month tax holiday to a full-year holiday at the end of February, under the assumption that a full-year extension will soon be negotiated.

Earlier Friday morning, Senate Majority Leader Harry Reid (D-Nev.) said that when the Senate receives a message from the House requesting a conference, the Senate would agree to the conference. Reid also made a unanimous consent request that once the House approves the two-month extension, the Senate would consider it as approved.

Before adjourning, Boehner announced the Democratic conferees to the payroll tax bill: House Ways and Means Committee ranking member Sandy Levin (D-Mich.), Becerra, House Budget Committee ranking member Chris Van Hollen, Budget Committee member Allyson Schwartz (D-Pa.) and House Energy and Commerce Committee ranking member Henry Waxman (D-Calif.).

Reid also announced Senate Democratic conferees: Finance Committee Chairman Max Baucus (Mont.) and Sens. Jack Reed (R.I.), Ben Cardin (Md.) and Bob Casey Jr. (Pa.).

Russell Berman and Molly K. Hooper contributed. 

— This story was last updated at 1:44 p.m.

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