[Update 2: Boehner expects House vote by end of week]
Temporary solutions only last so long, it seems.
Lawmakers are again considering the extension of the payroll tax cut, just months after a well-publicized congressional standoff in December ended with a two-month stopgap measure.
The Hill and The Washington Post reported late Tuesday that legislators neared a bipartisan deal on the tax cut, as well as other benefits, paid for in part by spending cuts elsewhere.
House Speaker John Boehner, R-Ohio, said Wednesday that lawmakers have an “agreement in principle” and expects a vote by the end of this week.
“We’ve worked all year to cut spending,” Boehner said. “Understsand here that we’re also going to make sure that the extension of unemployment is under a reformed program and is paid for, and the so-called ‘doc fix’ is paid for as well.”
A proposal already on the table, which House GOP leaders call a “backup plan,” would pass an extension through 2012, but without any additional measures to pay for it.
Boehner, House Majority Leader Eric Cantor, R-Va., and Majority Whip Kevin McCarthy, R-Calif., said they proposed the measure in case a conference committee cannot come to an agreement on how to fund an extension.
Time to act is running out. The tax cut is set to expire at the end of February, and Congress won’t be in session next week as members head to their districts.
“Republicans have attempted to reach an agreement and negotiated in good faith for months, and we will continue to do so,” the House leaders said in a release. “Democrats have refused virtually every spending cut proposed … and with respect to the need for an extension of the payroll tax cut, time is running short.”
President Barack Obama urged Congress in a speech Tuesday to quickly pass an extension, saying “we’re still fighting our way back from the worst economic crisis in our lifetimes.” The tax cut amounts to about $2,000 a year on a salary of $100,000.
“You can’t take anything for granted here in Washington until my signature is actually on it,” Obama said. “We have a common challenge. It’s time to meet it with a common purpose.”
The brief backup measure, H.R. 4013, was referred to the House Ways and Means Committee on Monday, and House Republicans said they could schedule it for consideration later this week.
That proposed bill does not include an extension of unemployment and Medicare benefits sought by Democrats and the Obama administration.
A 10-month extension beyond February would cost about $99.5 billion, according to an estimate from the Joint Committee on Taxation.
Any new extension, as it stands, would not affect the guarantee-fee increase included in December’s bill. The two-month extension in December upped the fees charged by Fannie Mae and Freddie Mac by at least 10 basis points through Oct. 1, 2021.
The Federal Housing Finance Agency said the g-fee increase on single-family mortgage-backed securities would take effect in April.
The Congressional Budget Office estimated the g-fees would offset about $35.7 billion in the costs of the tax cut passed in December.
ascoggin@housingwire.com
