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Congress Seals the Deal, Sends Payroll Tax Bill to Obama

In a rare bipartisan move, Congress approved a sweeping $150 billion package to extend a payroll tax holiday, jobless benefits and Medicare doctor payments today, giving the Obama administration a key policy win.

Extending the payroll tax cut for 160 million Americans has been a top priority for President Barack Obama since he unveiled a larger jobs program last summer, and the vote today was the capstone of a months-long battle to extend the holiday through the end of the year.

The Senate approved the deal, 60-36. Fourteen Republicans voted in favor of the package, while five Democrats and one Independent voted against it.

“It’s a miracle,” Senate Democratic Conference Vice Chairman Charles Schumer (N.Y.) said of final passage, as he and other Senators left the Capitol for Presidents Day recess.

But not all Members, especially Democrats, feel that way.

The legislation, which cleared the House on a bipartisan vote of 293-132 earlier in the day, was paid for in part by forcing new federal employees to pay more into their pensions.

Sen. Benjamin Cardin (D-Md.), a conferee who allowed the package to move to the full Congress on Thursday, voted against the deal.

“I voted no for a couple of reasons. The primary reason was that the unemployment insurance was offset in large part by federal employee additional contribution, which I think is just wrong,” Cardin said.

“I also felt that the lack of balance in not offsetting the tax cut and requiring emergency unemployment insurance to be offset is not right,” Cardin continued.

Democratic Sen. Barbara Mikulski, Cardin’s Maryland colleague, also voted against the deal.

Cardin had worked at the eleventh hour with Rep. Chris Van Hollen (D-Md.) and House Minority Whip Steny Hoyer (D-Md.) to amend the conference report language to exempt current federal workers. Cardin and Van Hollen, who made a pact to work in lock step throughout the process, both signed the conference report but voted against the final deal.

Many Republicans voted against the package because they were upset that the $100 billion tax cut was not paid for with other spending cuts. In the end, neither Democrats nor Republicans put up enough votes to pass it alone.

In the Senate, most Republicans opposed the measure but declined to attempt a filibuster. Like the House, there was bipartisan opposition in the Senate to the measure for a variety of reasons.

“I understand this is a compromise and not everyone likes everything in here,” House Way and Means Chairman Dave Camp said on the House floor.

The Michigan Republican co-chaired the conference committee with Senate Finance Chairman Max Baucus (D-Mont.), and after a few public hearings, the two men and their staffs hashed out the agreement behind closed doors with the aid of leadership.

The bill extends the payroll tax holiday for 160 million Americans and long-term unemployment insurance benefits until the end of 2012, as well as pushes off a scheduled cut to reimbursements for doctors who treat Medicare patients until the end of the year.

Notably, House Republicans waived their three-day rule in order to bring the bill to the floor today instead of Saturday.

Senate Republicans have said they are chafed about not being more involved in the discussions.

While all House conferees and the four Senate Democratic conferees signed off on the conference report, none of the three Senate Republicans that Minority Leader Mitch McConnell (R-Ky.) appointed to the committee did.

Nevertheless, the bill’s passage ends the months-long and often arduous negotiations that were almost derailed several times.

The main sticking point throughout was how to pay for the legislation.

Late in the negotiations, Republicans dropped their insistence that the $100 billion tax cut be offset, setting the stage for negotiators to reach an agreement on how to pay for the other portions.

The money is raised through a combination of telecommunications spectrum auctions, cuts to new federal workers’ pensions and a cut to Obama’s health care law.

Still, the cuts caused many Members to object to the legislation, with Democrats saying they go too far and Republicans believing they do not go far enough.

Hoyer unleashed a blistering floor speech against the legislation before the vote, noting that the cut to federal workers compelled him to vote “no.”

“This Congress is on the path to be the most anti-federal worker Congress that I have served in,” he said. “We talk here and we pass laws here, but none of that talk and none of those laws make a difference unless someone implements what we say.”

The fight that played out on the House floor leading up to the vote — on balancing deficit reduction with government spending to spur economic growth — was emblematic of the larger debate that has engulfed Washington since Republicans took over the majority in 2011.

Even Senate Democrats, in a closed-door caucus meeting Thursday, wrestled with approving a bill that would add $100 billion to the deficit. While Cardin and Mikulski gave impassioned speeches on behalf of federal workers, some of their colleagues were concerned about growing debt.

In fact, several Democratic Senators, including Mark Warner (Va.) and Joe Manchin (W.Va.), announced their opposition to the bill as early as Thursday.

“I would say the most important issue, and the one that is an overhang on everything else we debate here, is our inability to come to grips with our debt and deficit,” Warner said. “I know as we try to nurture this growing recovery, that one of the ways we take on that debt and deficit is by having a growing economy.”

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