Congress approves tax cut bill, Obama signs legislation

By Andrew Taylor

Associated Press

Published: Friday, Dec. 23 2011 11:52 a.m. MST

Ways and Means Committee Ranking Member Sander Levin, D-Mich., left, House Democratic Whip Steny H. Hoyer, D-Md., and Budget Committee Ranking Member Chris Van Hollen, D-Md., speak to the media about the payroll tax cut at the Capitol in Washington, on Friday, Dec. 23, 2011.

Jacquelyn Martin, Associated Press

WASHINGTON — After weeks of bickering and doubt, Congress delivered a last-minute holiday tax cut extension to 160 million American workers Friday along with further unemployment benefits for millions laid off in the nation's fierce recession and weak economic recovery. It was a convincing victory for President Barack Obama, a humbling retreat for House Republicans.

Obama quickly signed the legislation, declaring it was "some good news just in the nick of time for the holidays." But he added that serious and difficult work lay ahead for Congress and the administration after the break for Christmas and New Year's.

Back-to-back voice vote approvals of the two-month special measure by the Senate and House came in mere seconds with no debate, just days after House Republican leaders had insisted that full-blown negotiations on a yearlong bill were the only way to prevent an immediate tax increase on Jan. 1.

Most members of Congress were already gone for the holidays, leaving behind just a few legislators to take formal action. Obama was leaving in the afternoon for a delayed vacation in Hawaii. Obama called the congressional action "some good news just in the nick of time for the holidays" but said there was serious work aheadtime for the holidacti

The measure passed despite lingering grumbling from tea party Republicans. It buys time for talks early next year on how to finance the year-long extensions.

It will keep in place a 2 percentage point cut in the payroll tax — a salary boost of about $20 a week for an average worker making $50,000 a year — and prevent almost 2 million unemployed people from losing jobless benefits averaging $300 a week.

Senate and House Republican leaders did gain a major win last week, winning a provision that would require Obama to make a swift decision on whether to approve construction of the Canada-to-Texas Keystone XL oil pipeline. To stop construction, Obama, who had wanted to put the decision off until after the 2012 election, would have to declare that it was not in the nation's interest.

Passage of the tax bill in the House ended a holiday season Republican confrontation with Obama and Senate Democrats that had threatened to hit 160 million workers with a tax increase on Jan. 1. But it backfired badly. Even Republican Senate leader Mitch McConnell and the Wall Street Journal editorial board urged Speaker John Boehner and other House Republicans to act quickly and keep the tax cut in effect.

On Friday, an expressionless Boehner read from a piece of paper before him, gaveled the House's last session of the year closed and stepped off the podium on the Democratic side. He hugged the dean of the House, Rep. John Dingell, D-Mich.

"I wished him a Merry Christmas," Dingell said afterward. "I think he's somewhat at ease to have this mess off his back."

Democratic Senate leader Harry Reid, referring at least in part to legislators elected last year with tea party support, said he hoped the events had been "a very good learning experience, especially to those who are newer to this body. Everything we do around here does not have to wind up in a fight."

A full-year extension of the tax cut had been embraced by virtually every lawmaker in both the House and Senate but had been derailed in a quarrel over demands by House Republicans. Senate leaders of both parties had tried to barter such an agreement among themselves a week ago but failed, instead agreeing upon a 60-day measure to buy time for talks next year.

Thursday's decision by Boehner, R-Ohio, to cave in to the Senate came after days of criticism from Obama and Democrats. But perhaps more tellingly, GOP stalwarts including Republican senators and outside strategists warned that if the tax cuts were allowed to expire, Republicans would take a political beating that would harm efforts to unseat Obama next year.

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