US lawmakers reach compromise on payroll tax cut

U.S. House Speaker John Boehner said on Thursday that he had reached a deal with Senate Majority Leader Harry Reid to extend a payroll tax cut for two months.

Due to mounting pressure from the Senate and White House, Boehner and other GOP House leaders Thursday afternoon reversed their strong opposition to the short-term stopgap Senate measure.

Senate Minority Leader Mitch McConnell, the top GOP lawmaker in the upper chamber, earlier in the day urged the Republican-controlled House to pass the short-term extension of the tax cut bill sailing through the Senate on Saturday, and then move to a full-year negotiation.

But the Senate should immediately nominate negotiators to conduct negotiation for a full-year agreement on payroll tax cut and jobless benefits with GOP negotiators, which has been urged by GOP lawmakers for several days, Boehner said at a press conference.

"Senator Reid and I have reached an agreement that will ensure taxes do not increase for working families on January 1 while ensuring that a complex new reporting burden is not unintentionally imposed on small business job creators," Boehner said in a statement on Thursday.

"The Senate will join the House in immediately appointing conferees, with instructions to reach agreement in the weeks ahead on a full-year payroll tax extension. We will ask the House and Senate to approve this agreement by unanimous consent before Christmas," said the statement.

Boehner told reporters that he would call the vacationing congressmen back into session next week if he on Friday fails to get unanimous consent to a new bill on the basis of the Senate compromise, with newly-added amended language designed to reduce accounting burdens for small businesses. The unanimous consent is a time-saving agreement procedure instead of a roll call vote.

The Senate would also need to take a similar step before the bill was ready for U.S. President Barack Obama to sign into law.

Obama welcomed the hard-won compromise, ! saying i n a statement that "because of this agreement, every working American will keep his or her tax cut, about 1,000 dollars for the average family. That's about 40 dollars in every paycheck."

"For the past several weeks, I've stated consistently that it was critical that Congress not go home without preventing a tax increase on 160 million working Americans. Today, I congratulate members of Congress for ending the partisan stalemate by reaching an agreement that meets that test," Obama said.

"This is the right thing to do to strengthen our families, grow our economy, and create new jobs. This is real money that will make a real difference in people's lives," Obama added.

At issue was how to cover the revenue loss of the Social Security Trust Fund due to the one-year payroll tax cuts, with Republicans demanding further slashing government outlays and Democrats seeking a higher income tax rate for the super-rich.


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