After their recent ordeal to come to an agreement regarding deficit cutting measures, Congress’ bipartisan have managed to finally reach a deal. Republican and Democrat members of the Congress announced they have agreed to a payroll tax cut extension.
A few months ago it looked like Republicans and Democrats will never reach an agreement regarding finding an appropriate measure to cut the deficit. Not even a deadline or the so-called “incentive” of automatic cuts couldn’t determine them to put aside political differences. But, in a rare event, things changed as Congress had to face another deadline and deadlock over cutting payroll taxes. And surprisingly, the Republican and Democrat members of the House and Senate agreed to an extension of the payroll tax cut until the end of this year.
So, what did they agree on? First of all unemployment benefits will remain active, at least until the end of 2012. However, down the road, the maximum number of weeks payment can be collected will be gradually reduced. Secondly, Medicare reimbursements will not be affected by the proposed 27 percent cut. Thirdly, the deal means that workers will continue to benefit from the 2 percent payroll tax break.
Republican House Ways and Means Committee Chairman Dave Camp told the press that an agreement has been reached and that members in the Congress remain “confident this can be concluded”, although some issues still remained unsolved.
Democrat Senate Majority Leader Harry Reid added that the $150 billion measure “will keep our economy moving forward just as it is beginning to gain steam”.
The trouble at hand is that the agreement seems to stand on shabby reasons, as the Republican presidential nomination race reaches its peak. At the same time, it might also be a way for the Republicans to gain back the support they lost. A national poll earlier this week showed that Americans’ view of Obama has improved over the past few weeks.
Business Week points out to a similar motivation, calling the agreement “a tactical retreat for Republicans, who are generally unenthusiastic about the legislation but eager to move beyond the issue”.