Congress passed a bill Friday that will extend the current payroll tax deduction to the end of the year and leave about $20 extra per week in the average worker’s paycheck. The cut would have ended at the end of this month without a new extension.
Passage of the bill came after months of partisan discord. Republicans had insisted that the cut be offset by reductions in government spending, while Democrats said that workers needed the money to get them through tough economic times.
“Congress did the right thing and voted to make sure that taxes would not go up on middle-class families at the end of this month,” President Obama said during a speech to workers at a Boeing Co. production facility in Everett, Washington.
“Because you reminded people what it means to have 40 bucks taken out of your paycheck every week, it got done. This is a big deal. And I want to thank members of Congress for listening to the voices of the American people,” Obama said.
The tax cut was last extended in late December. Republicans and Democrats only renewed it through to February to buy time to negotiate the details of a lengthier extension.
“I support this measure and thank Chairman (of the House Ways and Means Committee Dave) Camp (R-Michigan) and our conferees for all their efforts to resolve this issue in a constructive fashion. There are a number of positive aspects to this agreement, including preventing a tax increase on hardworking Americans,” said House Speaker John Boehner, R-Ohio.
The bill also extends unemployment benefits for millions of Americans still struggling to find work, though it also over time reduces the number of weeks that workers may receive the benefits.