Workforce spared, for now, in tax cut extension

Republican leaders in the House of Representatives on Dec. 22 announced that they would accept compromise legislation that provides a two-month extension of the payroll tax cut set to expire at the beginning of the year.

For several days, House leaders had balked at a short-term, bipartisan compromise which Senate leaders had developed to give both chambers time to work out terms of a year-long extension of the cut. Under pressure to extend the cut, House leaders yesterday said they would accept the Senate’s agreement, with the addition of a new provision.

According to a statement issued yesterday by House Speaker John Boehner (R-Ohio), “a new bill will be approved by the House that reflects the bipartisan agreement in the Senate along with new language that allows job creators to process and withhold payroll taxation under the same accounting structure that is currently in place.”

The "bipartisan agreement in the Senate" cited by Boehner does not include any of the federal workforce provisions contained the Middle Class Tax Relief and Job Creation Act (H.R. 3630), which the House approved earlier this month. That bill, which would extend the payroll tax cut for a full year, also would extend the current two-year federal civilian pay freeze for an additional year, and make changes to federal retirement benefits.

Congressional leaders said they would ask members of the House and Senate to approve the legislation by unanimous consent, a procedure which would permit passage without calling lawmakers into session for a formal vote.