Senate approves payroll tax cut in 60-36 vote after GOP gives up filibuster

The Senate voted 60-36 Friday to extend the payroll tax holiday and unemployment benefits after Senate leaders agreed to lower the threshold for passing the legislation.

Fourteen Republicans voted for the legislation, including Senate Republican Leader Mitch McConnell (Ky.), who said just last week the cost of the payroll tax holiday extension should be offset.

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Republican Sens. Kelly Ayotte (N.H.), Scott Brown (N.H.), Thad Cochran (Miss.), Susan Collins (Maine), Lindsey Graham (S.C.), Chuck Grassley (Iowa), Dean Heller (Nev.), John Hoeven (N.D.), Dick Lugar (Ind.), Lisa Murkowski (Alaska), Marco Rubio (Fla.), Olympia Snowe (Maine) and Roger Wicker (Miss.) voted yes. 

Five Democrats and Sen. Bernie Sanders (Vt.), an independent who caucuses with Democrats, voted no. The Democrats were Sens. Ben Cardin (Md.), Tom Harkin (Iowa), Joe Manchin (W.Va.), Barbara Mikulski (Md.) and Mark Warner (Va.).

The legislation will now go to the White House for President Obama’s signature. It will extend a 2 percentage-point cut in the payroll tax through the year, as well as extend federal unemployment benefits and prevent a scheduled cut to doctors' payments under Medicare from taking effect.

The procedural agreement allowed the legislation to pass with a 51-vote margin, meaning only a handful of Senate Republicans would have had to vote for it. In the end, that precaution was unnecessary because enough Republicans did vote in favor of the tax cut, which prevents taxes from rising on an estimated 160 million voters.

Republicans wanted to get beyond the issue, which many saw as political loser for the party. In December, Republicans lost political momentum when House Republicans threatened to scuttle a two-month extension of the tax cut worked out by Senate Republicans and Democrats and the White House.

That two-month extension was offset; this 10-month extension of the tax cut was not. That led to more objections among Senate Republicans, who did not want to vote for a measure adding nearly $100 billion to the deficit.

The move by Senate Republicans to require only the 51-vote margin vote was unusual. In recent years, nearly every controversial bill has needed 60 votes to overcome a filibuster before receiving final consideration.

“We want it to pass, but we don’t want to vote for it,” a Republican senator, who requested anonymity, said of the legislation.

Majority Leader Harry Reid (D-Nev.) scheduled the roughly $150 billion package for a quick up-or-down vote after no Republicans objected.

Congress first lowered the payroll tax rate for employees from 6.2 percent to 4.2 percent after the 2010 midterm elections.

Republicans acknowledged that if the payroll tax holiday were to expire, Obama would likely use his bully pulpit to blame Republicans for a tax increase.

Most GOP senators did not want to vote for it, however, because it adds nearly $100 billion to the deficit and many think the temporary change to tax policy will have little positive effect on the economy.

McConnell said just last week that the cost of extending the payroll tax holiday should be offset.

“At what point do we anticipate getting serious here about doing something about deficit and debt? We think we ought to pay for it,” McConnell told reporters.

A senior GOP aide said Republicans had no intention of filibustering the bill. Doing so could have delayed final passage until the weekend or even have killed the compromise.

The greater threat came from Harkin, who considered blocking the legislation because he believes it will undermine Social Security.

The Iowa Democrat also balked at a $5 billion cut from a preventive healthcare fund he helped establish under the 2010 Patient Protection and Affordable Care Act.

Harkin said he decided against a filibuster after Democratic leaders made concessions to him but declined to reveal details.

“Certain arrangements have been made,” Harkin said. “I am satisfied now that going forward will be OK.”

The undisclosed sweeteners were not enough to win his vote for final passage. “I’m not voting for it. Are you kidding me?” he told reporters before the final vote.

Speaking on the Senate floor Thursday evening, Harkin said cutting payroll taxes and covering the shortfall in the Social Security trust fund with money from the general treasury would be a mistake. He said it would ruin the argument that Social Security has never contributed a dime to the national debt.

“I never thought I would have to see the day when a Democratic president of the United States and a Democratic vice president would agree to put Social Security in this kind of jeopardy," Harkin said. "Never did I ever imagine a Democratic president would be the beginning of the unraveling of Social Security.”

The bill came to the floor faster than many lawmakers expected. One of the conferees said Thursday that he expected a Senate vote around 5 p.m. Friday.

Reid told reporters Thursday that he did not expect the House to pass the legislation until 1 p.m.

The bill’s hasty passage created some confusion about which provisions made it into the final legislation.

Senate Democrats initially said a provision that seeks to keep welfare money from being spent in strip clubs did not survive the final cut, but it was included.

The legislation also extends unemployment benefits and freezes a scheduled cut to doctors’ Medicare payments.

—Josiah Ryan contributed to this report.

This story was posted at 12:01 p.m. and updated at 12:54 p.m.