An extension of the payroll tax cut which Nebraskans have been enjoying for a year is in jeopardy now that the House has rejected a temporary measure approved by the Senate.
The House voted 229-to-193 to reject the Senate measure.
Congressman Lee Terry assesses the state of Congress today.
“Chaos is the only thing I can say,” Terry tells Nebraska Radio Network.
Terry says the House agrees that the two percent cut in the tax that funds Social Security should be extended to 2012. But, the House also wants tighter restrictions on benefits for the long-term unemployed and deeper cuts to discretionary spending.
The outcome is uncertain. The House wants to negotiate with the Senate, but the Senate has adjourned until late January.
Terry says the measure approved by the Senate 89-10 simply isn’t acceptable.
“The Senate, obviously, threw us a huge curve on Saturday with the 60 day (extension),” Terry says. “And, so, what we’re doing in essence is saying we won’t agree to the 60 days so let’s get together and negotiate an agreement between the two sides which is normal course of business here.”
A lot is at stake. Without an agreement, payroll taxes return to their normal level of 6.2% and 160 million Americans would lose a tax cut expected to average about $1,000 for 2012, including a million Nebraska workers. Also, about two million long-term unemployed Americans would lose benefits.
The Senate this past weekend approved a compromise measure to extend the payroll tax cut for 60 days to give Congress time to reach agreement for a full one-year extension. It would continue benefits for the long-term unemployed and keep Medicare reimbursement rates for doctors from being cut. The Senate stripped proposals approved in the House to restrict unemployment benefits and make cuts in discretionary spending. It left in a provision requiring the president to act quickly on TransCanada’s pending permit for the Keystone XL pipeline in effort to lure Republican support, which it did, leading to the 89-10 vote.