Negotiators reach tentative payroll tax cut pact

(AP) - House-Senate talks on renewing a payroll tax cut that delivers about $20 a week to the average worker yielded a tentative agreement Tuesday, with lawmakers hopeful of unveiling the pact Wednesday and sending the measure to President Barack Obama as early as this week.

Under the outlines of the emerging agreement, a 2 percentage-point cut in the Social Security payroll tax would be extended through the end of the year, with the nearly $100 billion cost added to the deficit. Jobless benefits for the long-term unemployed would be renewed as well, with the $30 billion or so cost paid for in part through auctioning broadcast spectrum to wireless companies and requiring federal workers to contribute more toward their pensions.

Rep. Mike Simpson, R-Idaho, said it was described to lawmakers as a tentative agreement.

The payroll tax cut and renewing jobless benefits were key planks in Obama's jobs program, which was announced in September. The payroll tax cut benefits 160 million Americans and delivers a tax cut of about $20 a week for a typical worker making $50,000 a year. People making a $100,000 salary would get a $2,000 tax cut.

The deal would not only be a win for Obama but would take the payroll tax fight - which put Republicans on the defensive - off the table for the fall election campaign.

"The mood is to get it off the table," freshman Rep. Dennis Ross, R-Fla., said. "We've got to move on to another issue."

The agreement also would avert a huge cut in Medicare payments to doctors, financed by cuts elsewhere in the federal health care budget, GOP and Democratic aides said.

The pact received a mixed but generally positive reception from rank and file House Republicans, who discussed the matter at a meeting Tuesday evening.

Aides in both parties said Senate Democrats were largely rebuffed in an effort to renew a package of expired tax breaks for individuals and businesses, including clean energy tax credits cherished by Democrats. A tax break sought by businesses that purchase new equipment was dropped as well.

A GOP aide, who required anonymity to discuss the talks, said negotiators were finalizing an agreement on reducing the number of weeks jobless workers would be eligible to receive unemployment benefits to a maximum of 63 weeks in most states. People in states with very high unemployment rates would be eligible additional weeks. Maximum benefits are now 99 weeks in states with the highest jobless rates.

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