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Payroll Tax/UI Bill Still Mired in Negotiations Over Pay-Fors

There is less optimism now over the prospects of a deal wrapping up on the payroll tax cut, unemployment insurance and a doctor’s fix on Medicare reimbursement rates than there was this morning. Leading House Democrats exhibited caution over declaring a deal done.

“We’re still a long ways from getting there,” said Rep. Xavier Becerra (D-Calif.), one of the Democratic members of the committee working on the deal. Becerra stressed that progress had been made. “We hope that things will move forward.”

“We’ve seen this play before,” Rep. John Larson (D-Conn.) told reporters. “As you all painfully know, things have had the ability to change around here rather rapidly when it appears a deal has been struck and then it appears that deal is no longer in place.”

Larson said he hoped that House Speaker John Boehner (R-Ohio) would be able to marshal Republican support for the deal […]

“If the agreement comes together like I expect it will, the House should vote this week,” Boehner said. “I think there’s an agreement in principle, but there are a lot of details that are yet to be worked out, and I’m hopeful that that’ll be wrapped up today.”

An agreement in principle! Just like the foreclosure fraud settlement!

Among the last-minute issues is a possible pay-for in the deal that would force federal employees to make greater contributions to their pensions. Over $50 billion of the $150 billion package will be paid for, and the increase in pension contributions was floated as one of the offsets.

“I’m very unhappy with the projected pay-fors which hit average working Americans, otherwise known as federal employees, pretty hard,” House Minority Whip Steny Hoyer (D-MD) told TPM and one other reporter in the Capitol Wednesday. “I don’t know the exact details and the exact details are being worked on. So from that standpoint I’m not happy.”

The other issue concerns unemployment insurance and the number of weeks of eligibility. I’ve heard that benefits will get cut off anywhere from 63 to 73 to 75 to 89 weeks, all of which are reductions from the top-tier benefit of 99 weeks currently. There will be different tiers set up, with hardest-hit states only allowed to access the final tiers. So 63 weeks could become the norm in most states, which is down from current law (roughly 79 weeks).

The plan is to wrap up the final details by the end of the day, and pass the bill this week, so Congress can go on a one-week President’s Day recess next week. But the other looming issue is heading off a potential revolt from House Republicans over the whole concept of extending the payroll tax cut, particularly without funding offsets. Paul Ryan, the chair of the House Budget Committee, questioned that today, showing a newfound concern for Social Security, despite writing a budget that would divert some Social Security funds into private accounts.

“Members on our side of the aisle are divided on this question. I personally have a problem with what happens with the Social Security trust fund. So people are divided on this; the Democrats agreed to it, I’d say I don’t really know what the number of Republicans are that agree to it, so they basically decided to bring it to the floor and let Congress work its will, and let people vote however they want to,” Ryan said during an interview with WLS Radio in Chicago.

Ryan’s criticism echoed comments he made Sunday, when he warned that extending the tax holiday without offsetting cuts put the future of Social Security in danger. But it represents a break from House GOP leadership, who announced earlier this week that they would not require spending cuts to offset the costs of the tax cut. Republicans hope to prevent another public showdown on the issue after being hammered by Democrats for almost allowing the tax cut to lapse in December.

“If you just extend this without paying for it by cutting spending, then you’re accelerating the bankruptcy of Social Security,” Ryan said on ABC’s “This Week.”

How nice of him to care. Setting aside the issue, if Ryan’s perspective catches fire on the right side of the aisle, then it will take a combination of most Democrats and Republicans eager to get this issue off the table in order for the bill to pass the House. That could mean a delay, because it would be hard to get to the 290 votes needed to pass such a bill on the suspension calendar. Under regular order there would have to be a Rules Committee vote, and a slower process for the bill.

We should know more by tonight.

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David Dayen

David Dayen

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