After months of partisan debates about the potential extension of payroll tax cuts, a tentative deal between Republicans and Democrats was reached Tuesday (Feb. 14) evening, days before the current deal was set to expire at the end of the month. This tentative deal would result in a continuation of payroll tax cuts worth $100 billion that would affect 160 million working Americans, according to a New York Times report. Additionally, the proposal would extend unemployment benefits and prevent a 27 percent cut in Medicare payments to doctors that was also set to expire at the end of the month, according to the Los Angeles Times.
Additional reporting by the Los Angeles Times stated that the cuts would result in a 2-percentage-point cut in the amount that workers pay into Social Security. The new deal would also extend unemployment benefits, but the length of that agreement will vary based on states' unemployment levels. Although residents in states with high enough unemployment rates would be eligible to take advantage of unemployment benefits for 73 weeks, no states will likely qualify for that protection, meaning that most states would be eligible for 63 weeks of unemployment benefits, according to the Los Angeles Times article.
The deal was reached after House Republicans made a key concession to extend the cuts without requiring spending cuts to pay for them. That concession had been a major sticking point for the two sides, according to the New York Times report. Despite the encouraging signs, the tentative deal still needs to be voted on in order for it to become official.
"As you guys know, you can't take anything for granted here in Washington until my signature is actually on it," President Barack Obama said Tuesday before news of the reported progress. "So we've got to keep on making sure that the American people's voices keep breaking through until this is absolutely, finally, completely done."
With that said, there is optimism that the deal will still go to a vote by Friday, before Congress adjourns for a weeklong recess to celebrate Presidents Day.
Reach BusinessNewsDaily staff writer David Mielach at Dmielach@techmedianetwork.com. Follow him on Twitter @D_M89.