–President Obama: ‘This Is Good News’
–House Speaker Boehner: Both Chambers Will Pass Short-Term Extension
–Rep, Boehner: Seeks To Pass Short-Term Extension Before Christmas
–Rep. Boehner: House-Senate Talks On One Year Agreement To Begin Soon

By John Shaw

WASHINGTON (MNI) – House Speaker John Boehner said Thursday
evening that he has reached an agreement with Senate Majority Leader
Harry Reid that will allow a short-term extension of last year’s
payroll tax cut while beginning immediate negotiations for a one-year
package.

At a briefing, Boehner said the House and Senate will pass before
Christmas a two month extension bill which slightly revises the bill
that the Senate passed Saturday.

Boehner said he will try to pass the short-term package by
unanimous consent in the House and added that if anyone chooses to block
the bill in the House he will summon the lower chamber back into session
next week.

Boehner said that as part of the agreement, the House and Senate
will quickly create a House-Senate conference committee to “work
expeditiously” to draft a one year package.

“We’ve fought the fight, the good fight,” Boehner said, referring
to the House GOP’s initial resistance to the package the Senate passed
on Saturday.

In a statement, President Obama said that he is glad the agreement
has been reached to end “the partisan stalemate” and allow the payroll
tax cut extension to go forward.

“This is good news, just in time for the holidays,” Obama said.

Both the House and Senate have pro forma sessions scheduled for
Friday and it appears likely that both Boehner and Reid will use these
sessions to pass the two-month extension packages by unanimous consent.

In a separate statement, Reid confirmed the agreement, saying that
Boehner effectively agreed to pass the Senate bill.

The breakthrough that occurred Thursday evening is the result of
mounting political pressure on House Republicans and was facilitated by
a proposal made earlier in the day by Senate Minority Mitch McConnell to
pass the short-term extension now and begin immediate talks on a
one-year agreement.

The House voted Tuesday to reject the Senate’s compromise bill that
would have given a two-month extension to last year’s payroll tax cut,
renew unemployment insurance benefits and prevent a sharp cut in doctor
payments under Medicare.

The House also voted Tuesday to reaffirm its support of the
Republican package that would extend for one-year the current 4.2%
payroll tax rate for employees and renew unemployment insurance benefits
for workers who have been unemployed for more than six months. The plan
would extend for two years the so-called “doc fix” to prevent Medicare
payments to doctors from being cut by more than 27%.

The House GOP plan would have removed barriers to construction of
the Keystone XL project and delay a new pollution standard for
industrial boilers.

Once the two-month extension is approved by Congress in the coming
days, Congress’s focus will shift to crafting a one-year package. That
bill is expected to cost about $200 billion and much of the debate will
be on how to pay for the package.

** Market News International Washington Bureau: (202) 371-2121 **

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