House Votes to Extend Payroll Tax Cuts, Unemployment Benefits in $150B Stimulus Package

The U.S. House of Representatives voted Friday to extend a payroll tax holiday for 160 million workers and unemployment benefits for millions of others through the rest of the year as part of a $150 billion economic stimulus package. The bill will now move on to the Senate, where it is expected to be quickly approved.

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Garnering bipartisan support in a 293-132 vote, the plan would extend a 2-percent payroll tax cut through the end of the year that would have otherwise expired after February 29. Part of an economic stimulus package that took effect at the beginning of 2011, the tax cuts are meant to give Americans a little extra spending money each month to put back into the economy.

The bill also includes a provision to extend a cushion for the unemployed, though Democrats ceded some ground on the issue to Republicans, who won a reduction in unemployment eligibility. The maximum tenure for receiving benefits is currently 99 weeks in many states, but under the deal, the unemployed in most states would only be able to claim jobless benefits for 63 weeks, while workers in states hit hardest by the recession would be eligible for 73 weeks. The legislation would also temporarily fix Medicare’s payment plan so as to prevent a 27-percent drop in fees paid to doctors who treat elderly patients.

Friday’s vote put an end to months of debate in a bitterly divided House, during which many Republicans argued that the tax-cut extension should be offset by spending cuts. Ultimately, House and Senate negotiators crafted a package that did not offset the $100 billion tax provision, which would provide the average American worker with an extra $1,000 in spending money this year. Instead, they included spending cuts to finance the unemployment benefits and the measure supporting payments to Medicare doctors.

When all was said and done, 146 Republicans and 147 Democrats voted for the plan, while 91 Republicans and 41 Democrats cast “no” votes. Though it seems likely the Democrat-led Senate will pass the bill, many Republican Senators, as well as a handful of Democrats, have voiced their opposition to the plan. Some Democrats have complained that federal workers are being forced to shoulder the biggest spending cut. The plan would produce $15 billion in savings by requiring new federal employees to contribute an additional 2.3 percent to their pension plans.

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To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com