WASHINGTON (Xinhua) -- The Obama administration on
Tuesday claimed a long-awaited political victory of extending
payroll tax cut and jobless benefits for the long-term unemployed,
and urged Congress to take more steps in line with the government to
boost exports and rebuild America.
Both parties showed rare bipartisanship last week, and the GOP-
led House of Representatives on Friday voted to pass the extension
of the payroll tax cut and jobless benefits for the long-term
unemployed for the rest of this year on an overwhelming vote of 293
to 132.
The Senate on Friday followed shortly afterward with a vote 60 to
36 vote.
"This tax cut makes a difference for a lot of families," Obama
said at a Tuesday White House event marking the passage of the tax
cuts. He was expected to sign the bill into law in coming days.
The agreement represents a victory for Obama and his fellow
Democrats, who have argued that payroll tax cut for Americans could
provide a boost to the nascent economic recovery. Republican
lawmakers also have reason to welcome the deal, as it gets a
politically troubling issue off the table.
The bill could avoid a payroll tax hike for Americans on March 1,
renewing unemployment benefits for the long-term unemployed as well
as averting a steep cut in Medicare doctors' fees.
Failure to extend the payroll tax holiday will reduce U.S. real
gross domestic product (GDP) in 2012 by 0.4 percentage point, while
not extending the unemployment benefits will translate into a 0.3
percentage point real GDP growth decrease this year, Moody's
Analytics chief economist Mark Zandi wrote on his blog.
The payroll tax was first reduced from 6.2 percent to 4.2 percent
in the beginning of 2011 at the request of Obama to bolster
consumption and economic recovery. Obama and his fellow Democrats
have fought hard to renew the tax cut to woo middle- class voters,
triggering rounds of bitter partisan wrangling in recent months.
Payroll tax, or employment tax, was imposed by the U.S. federal
government on both employees and employers to fund entitlement
programs including Social Security and Medicare.
The two-percentage-point payroll tax cut fell short of Obama's
goal of halving it to 3.1 percent put forward last year in his 447-
billion-dollar jobs bill, which has been blocked by rival
Republicans who insisted that new fiscal spending moves would add
red ink to the federal government as the nation's total public debt
has surpassed 15 trillion U.S. dollars.
The bill is also designed to wind down the program of extended
federal jobless benefits approved by Congress during the recession.
The bill caps the current maximum duration 99 weeks of jobless
benefits to 73 weeks, depending on different states' jobless rates.
MIXED REACTION
In an presidential election year, the payroll tax and jobless
benefits deal drew hyperbolic rhetoric from the rival parties.
With public approval rating for Congress at a record low, U.S.
House Speaker John Boehner, the top GOP congressman, and his top GOP
lieutenants said last week that they would not insist that the cost
of the deal be offset with spending cuts elsewhere.
The passage of the 143-billion-dollar measure before this week' s
congressional recess ended a contentious political fight, but
sparked mixed reaction from Republicans and Democrats. Boehner and
