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Negotiators Reach Deal on Extending Payroll Tax Cut

Tom Williams/CQ Roll Call File Photo
House Ways and Means Chairman Dave Camp (right) and Senate Finance Chairman Max Baucus completed the deal after a long day of negotiations.

Updated: 1:02 a.m.

House and Senate negotiators announced late Wednesday evening a sweeping deal to extend a payroll tax cut, jobless benefits and Medicare doctor payments, overcoming several last-minute obstacles that appeared to imperil the bipartisan agreement.

House Ways and Means Chairman Dave Camp (R-Mich.) and Senate Finance Chairman Max Baucus (D-Mont.), the two top lawmakers on the panel tasked with finding agreement, announced the deal just before 1 a.m., indicating that Congress would send a bill to President Barack Obama’s desk by week’s end.

“It’s very good for the country. We have an agreement,” Baucus said. “We have agreements, and I’m totally convinced and assured that we’ve talked to conferees and there will be a majority of the conferees that will sign it.”

The leaders were scant on details coming out of a meeting with other conferees that lasted more than an hour, however. Camp said there are some “technical issues” that “continue to be worked on,” and conferees have not yet signed the report.

“My job is to bring this over the finish line, and I’m confident that we can get there,” Camp said.

Late-night meetings and proclamations of “good” news topped a roller coaster of a day in which a deal seemed imminent in the early afternoon and then on the brink by late evening. An unpopular offset in the original framework of the payroll conference deal cut into federal worker pensions, a move especially maligned by Democrats from Maryland and Virginia, home to many federal employees.

House Minority Whip Steny Hoyer (D-Md.) and payroll tax conferees Rep. Chris Van Hollen (D-Md.) and Sen. Benjamin Cardin (D-Md.) worked late into the evening Wednesday to replace the offset. A source close to the talks indicated that the compromise position requires new federal employees to pay more into their pensions, while older employees are grandfathered in under current law.

Of all the Democrats engaged on the issue, Cardin had been in the toughest spot of all. In order to approve the conference report, the legislation needed the support of a majority of Senate and a majority of House conferees. When it became clear no Senate Republicans would sign off on the deal, leaders needed all four Senate Democrats, including Cardin, to back the compromise package. Extending the tax break has been a top priority for the Obama administration, which had included the cut in its jobs package last summer.

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