Senate passes extension of payroll tax and jobless benefits
Updated: December 17, 2011 - 11:54 am
WASHINGTON (AP) — The Senate passed legislation Saturday extending a Social Security payroll tax cut and jobless benefits for just two months, handing President Barack Obama a partial victory while setting the stage for another fight in February.
It also brought a peaceful end to a year-long battle over spending by passing a $1 trillion-plus catchall budget bill that wraps together the day-to-day budgets for 10 Cabinet departments and military operations in Iraq and Afghanistan. The House passed the measure Friday, and the White House has signaled that Obama will sign it.
The renewal of the 2-percentage-point cut in the Social Security payroll tax for 160 million workers and unemployment benefits averaging about $300 a week for the additional millions of people who have been out of work for six months or more is a modest step forward for Obama's year-end jobs agenda.
As a condition for GOP support of the payroll tax measure, Obama has to accept a provision demanded by Republicans that forces him to decide within 60 days whether to approve or reject a proposed a Canada-to-Texas oil pipeline that promises thousands of jobs.
The budget bill, passed 67-32, heads to the White House for Obama's signature; the payroll tax measure won a 89-10 tally that send it back to the House — where many Republicans only reluctantly support it — for a vote early next week.
Democratic and GOP leaders opted for the short-term extension of the payroll tax and jobless benefits measure after failing to agree on big enough spending cuts to pay for a full-year renewal. The measure also provides a 60-day reprieve from a scheduled 27 percent cut in the fees paid to doctors who treat Medicare patients.
The $33 billion cost of the measure would be covered by raising fees on new mortgages backed by Fannie Mae and Freddie Mac.
The fees, drawn from a Treasury Department housing finance market reform plan, would effectively raise the interest rate on home loans guaranteed by the mortgage giants and the Federal Housing Administration by one-tenth of a percentage point.
The idea is to open up the market to private companies currently priced out by the implicit subsidies of Fannie and Freddie.
The White House says the fee would increase the monthly cost of a typical $200,000 mortgage by almost $17 a month. Over 30 years, the fees would increase the total cost of such a mortgage by more than $5,000.
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