Resolving a heated dispute, the House and Senate have cleared a bill to extend, through February, the current payroll tax cut for individuals and require the Obama administration to decide soon whether to let the controversial Keystone XL crude-oil pipeline move ahead.
The stopgap measure, which the chambers approved in brief morning sessions on Dec. 23, was signed the same day by President Obama.
Other provisions extend, through February, unemployment insurance benefits and prevent a cut in Medicare payments to doctors.
Brian Turmail, a spokesman for the Associated General Contractors of America, said, “Best we can tell, the primary benefit of this measure is that the economy dodges a very small hit, and that should be good for maintaining the modest growth in private-sector demand for construction.”
But the bill’s benefits will be only temporary. Senate and House lawmakers have agreed to begin, in early January, to negotiate an extension of the payroll tax, unemployment and Medicare provisions at least through calendar 2012.
In addition, the National Association of Home Builders criticized a provision to offset the costs of the extended tax breaks by increasing guarantee fees that Fannie Mae and Freddie Mac charge to mortgage lenders. NAHB Chairman Bob Neilsen said, “Using ‘G-fees’ to fund budget gaps sets a terrible policy precedent.”
Neilsen, a Reno, Nev., homebuilder, added, “The housing market is struggling to emerge from its worst downturn in decades. Placing additional burdens on homebuyers would do more harm to the economy than good.”
Moreover, the Keystone pipeline provision, which project supporters pushed for, may not result in a green light for the pipeline.