Congress Reaches Deal to Extend Payroll Tax Cut
- Posted At : February 16, 2012 7:13 PM
- | Posted By : Nancy Coffman
- Related Categories: Closely Held Business, Tax News, Medical Practices, Featured Events, Accounting & Audit Updates
House and Senate negotiators finalized a deal to extend the payroll tax cut, emergency unemployment benefits and the Medicare reimbursement rate for doctors. Although a few minor details remain to be worked out, a majority of conferees have endorsed the package. It looked possible at one point that the plan would be derailed over a provision that would have included cuts to federal pensions. In the end, a compromise was reached that mandates that new federal employees contribute more to their pension funds than workers already on the federal payroll.
The deal extends the payroll tax cut through 2012, with its $100 billion cost added to the deficit. The agreement also reforms the unemployment insurance program, reducing the maximum number of weeks an unemployed worker could receive benefits from 99 to 73 by the end of the year. Those benefits are to be funded by roughly $15 billion in revenue from the sale of spectrum rights. The third part of the deal averts a 27 percent cut in the reimbursement rate for doctors under Medicare, paid for with savings from the 2010 health care overhaul, Medicaid and Medicare.
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