Congress passes economic stimulus of payroll tax cut

A $143 billion economic package to extend the payroll tax holiday and unemployment benefits

Large bipartisan coalitions in both the House and Senate passed a $143 billion economic package that includes a year-long extension of the payroll tax holiday for 160 million workers, just as Obama had requested more than five months ago, and also extends unemployment benefits for millions of others.

On a 293 to 132 vote on Friday, February 17, the House supported a compromise plan to keep giving workers a small amount of extra cash with each paycheck while also providing a continued cushion for the unemployed, and the Senate followed shortly afterward with a 60 to 36 vote to approve the plan. It now goes to Obama for his signature, giving him a victory on a portion of the massive jobs bill he presented to Congress last fall.

The package would help buoy the economic recovery by putting more money in the hands of consumers, whose spending accounts for roughly two-thirds of the economy. The bill also reduces the amount of time unemployed workers can receive benefits and also assures that doctors do not see a scheduled 27 percent drop in payments from Medicare.

The new stimulus bill comes three years to the day after Congress passed Obama’s $787 billion American Recovery and Investment Act, his administration’s first attempt to restart the sputtering economy. With Friday’s action, Congress has now spent more than $1.15 trillion since 2009 trying to boost the economy, including the original stimulus bill, the 2010 extension of President George W. Bush’s income tax cuts, the payroll tax cuts over the last three years, first-time homebuyer’s tax credits and unemployment expansions.