House speaker says payroll tax bill won't aid U.S. economy much

WASHINGTON -- A compromise bill extending a payroll tax cut and jobless benefits for the long-term unemployed should be enacted, but it's not going to help the economy much, House Speaker John Boehner said Thursday.

Boehner, R-Ohio, made the remarks hours after bipartisan congressional bargainers announced agreement on legislation extending those provisions through 2012 and heading off a steep cut in reimbursements for physicians who treat Medicare patients. The bill would assure a continued tax cut for 160 million workers and jobless benefits for several million others, delivering top election-year priorities to President Barack Obama and edging a white-hot political battle a big step closer to resolution.

Boehner told reporters the accord is "a fair agreement and one that I support."

Bargainers completed the bill's final details Thursday afternoon, resolving technical questions about savings the bill would pluck from federal workers' pensions and government sales of portions of the broadcast spectrum.

One top negotiator, Sen. Max Baucus, D-Mont., said leaders were anticipating pushing the legislation through Congress today.

In a jab at Obama, Boehner minimized the impact the measure would have. Last fall, Obama proposed extending the payroll tax cut and added jobless benefits through this year as major pillars of his program for creating jobs.

"Let's be honest, this is an economic relief package, not a bill that is going to grow the economy and create jobs," Boehner said.

Boehner's comment underscored the GOP's desire to limit Obama's ability to declare victory over the legislation. The fight over the payroll tax cut and jobless benefits has been waged since late last year and has taken a political toll on Republicans.

Both proposals initially ran into GOP resistance, some of which lingers. But Republicans have largely concluded it would be damaging to oppose the package, particularly in this presidential and congressional election year.

That contrasted with their attitude in December, when House Republicans refused to back a bipartisan Senate bill providing a two-month extension of the tax cuts and jobless benefits while bargainers completed a yearlong deal. Within days, they retreated under barrages of criticism from Republicans and conservatives around the country.

Illustrating their reluctance to be seen as blocking a middle-class tax cut, House Republicans removed the major hurdle to the legislation earlier this week when they agreed that the payroll tax cut -- making up about two-thirds of the measure's cost -- would not have to be paid for with spending cuts.

The House's top Democrat, Rep. Nancy Pelosi, said Democrats are mostly satisfied with the compromise and said it should be pushed through Congress quickly.

"I don't think the American people can wait another day," Pelosi, D-Calif., told reporters.

Pelosi said that while Democrats were hoping parts of the roughly $150 billion measure could be paid for with savings from winding down wars in Iraq and Afghanistan, "I don't see a scenario where our members would vote against it."

The two lead negotiators, Rep. David Camp, R-Mich., and Sen. Max Baucus, D-Mont., said shortly after midnight that they had reached agreement and that only technical issues and the drafting of legislative language remained.

The bargainers spent Wednesday trying to extinguish last-minute brushfires.

Chief among the late disputes was a proposal to save around $15 billion -- about half the $30 billion cost of the bill's extended jobless benefits -- by requiring federal workers to contribute an additional 1.5 percent of their pay to their pensions.

Democrats, including Sen. Ben Cardin and others from Maryland, home to many government employees, resisted that plan, holding up a final handshake among congressional bargainers. The provision was ultimately changed to target the boost only at newly hired federal workers, requiring them to contribute 2.3 percent of their salaries toward defined benefit pensions.

There was little controversy over the main thrust of the bill.

A 2-percentage-point cut in the 6.2 percent Social Security payroll tax, which is deducted from workers' paychecks, would run through 2012. For a family earning $50,000 a year, the cut saves $1,000 annually.

Extra unemployment benefits for people out of work the longest would be extended for the same period, and a 27 percent slash in federal reimbursements for physicians who treat Medicare patients would be averted.

Unless Congress acts, the tax cut and added jobless benefits would expire, and doctors' Medicare payments would be reduced, all on March 1.

In a GOP win, the bill would phase down the current maximum 99 weeks of jobless coverage to 73 weeks in the hardest-hit states by autumn, though in most states, people would get no more than 63 weeks.

Besides increasing new federal workers' pension contributions, more savings were supposed to come from government sales of parts of the broadcast spectrum to wireless companies. The spectrum auction was supposed to raise about $15 billion -- even after $7 billion would be spent for a new communications network for emergency workers.

The government's main welfare program would be continued through this year. Republicans won a provision barring welfare recipients from using their electronic cards to withdraw cash from teller machines in liquor stores, strip clubs and casinos.

The $20 billion price tag for preventing the cut in doctors' Medicare reimbursements would be covered partly by trimming a fund Obama's health care overhaul created to help prevent obesity and smoking. There would also be reductions in Medicaid payments to hospitals that treat high numbers of uninsured patients.

Dropped from the final compromise were proposals to renew expiring business tax cuts; a GOP plan to require unemployment recipients to work toward high school equivalency diplomas; and another Republican provision, aimed at illegal immigrants, requiring low-income people to have Social Security numbers before they can get checks from the Internal Revenue Service for the children's tax credit.