Progress in talks on payroll tax, jobless benefits (AP)

WASHINGTON ? House-Senate talks on renewing President Barack Obama's signature payroll tax cut made significant progress Tuesday, and aides said an agreement could be reached later in the day.

There are, a Democratic aide said, a "couple of lingering issues ... . (We're) getting closer and closer." The aide required anonymity to assess the private negotiations.

The negotiations intensified after House GOP leaders dropped a demand that the $100 billion or so cost of renewing the 2 percentage point cut in the Social Security payroll tax be defrayed with spending cuts elsewhere in the budget. But negotiators still need to find savings to pay for the $30 billion cost of renewing jobless benefits and $20 billion price for fixing a Medicare payment formula for doctors through the end of the year.

Senate Democrats also are pressing to renew expired tax breaks for individuals and businesses at a cost of about $20 billion, Senate Majority Leader Harry Reid, D-Nev., said.

Republicans, who just Monday said Democrats hadn't been negotiating in good faith, agreed with the positive assessment.

"There is definitely positive progress," said Michael Steel, a spokesman for House Speaker John Boehner, R-Ohio.

A GOP aide, also requiring anonymity to discuss the talks, said negotiators were finalizing an agreement on reducing the number of weeks jobless workers would be eligible to receive unemployment benefits to a maximum of 63 weeks in most states. Maximum benefits are now 99 weeks in states with the highest jobless rates.

But Republicans were expected to drop a proposal requiring unemployed people to enroll in GED classes to obtain benefits.

Without action by Congress by the end of the month, payroll taxes will rise for 160 million Americans. The 2 percentage-point tax cut would deliver a tax cut totaling $2,000 this year for someone making a $100,000 salary and a tax cut of $20 a week for a typical worker making $50,000.

Obama weighed in Tuesday, urging Congress to act immediately to renew both the payroll tax cut and jobless benefits for millions of workers who have been out of work for more than six months.

"Just pass this middle-class tax cut. Pass the extension of unemployment insurance," Obama said at a White House appearance. "Do it before it's too late and I will sign it right away."

Democrats in the Senate warned Republicans that they would pay a political price for extending the payroll tax cut while allowing millions of jobless people lose their unemployment benefits. Also at issue is preventing doctors from absorbing a huge cut in their Medicare payments if Congress doesn't patch an outdated reimbursement formula.

Sen. Chuck Schumer, D-N.Y., said the implicit GOP threat of allowing jobless benefits to expire is "just as fraught will peril" as allowing the payroll tax holiday to lapse.

"We believe that we sort of have the upper ground," Schumer said.

Source: http://us.rd.yahoo.com/dailynews/rss/obama/*http%3A//news.yahoo.com/s/ap/20120214/ap_on_go_co/us_payroll_tax

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