The Big Story Blog

Payroll tax cut drama postponed but not over

Posted at 8:31 AM on December 23, 2011 by Paul Tosto
Filed under: Economy, Jobs and unemployment

After weeks of wrangling, House leaders have agreed to extend a federal payroll tax cut that was due to expire at the end of the year. The deal will be approved formally today.

While that's solved the short term problem, the deal's only good for two months, setting up a fight most likely in February, made even harder in a political year.

The Washington Post this morning writes:

The agreement resolved the last stalemate in a year of bitter congressional fighting that earned lawmakers their lowest approval ratings in recent memory.

In exchange for supporting the 60-day patch, Republicans secured minor face-saving concessions from Senate leaders, who had already passed a two-month deal on an overwhelming vote of 89 to 10. Senate leaders had balked at the House's demand to restart talks over the holidays on a full-year extension of the tax cut.

The Senate agreed to make a technical change to the payroll tax reporting requirements, designed to lessen the burden on small businesses of implementing the two-month deal.

Here's what some in the Minnesota delegation had to say:

Rep. Michele Bachmann (R) - Bachmann's office said she didn't have a statement about the agreement.

Rep. Betty McCollum (DFL) - "Ending this needless political drama means 160 million working Americans will not see their taxes increase and that is good news for families and the economy. I hope this compromise sets the tone for addressing our nation's most serious problems in the coming year."

Rep. Tim Walz (DFL) - "I am pleased that compromise was allowed to prevail to prevent a tax increase on 160 million hardworking Americans."

We'll take a deeper look today at the legislation and what it means for Minnesota.

About Paul Tosto

Paul Tosto

Paul Tosto writes the Big Story Blog for MPR News. He joined the newsroom in 2008 after more than 20 years reporting on education, politics and the economy for news wires and newspapers across the country.

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