Deal reached on payroll tax holiday

last updated 8 January 2015

Congressional leaders reached a tentative agreement this week to extend the payroll tax cut through the end of 2012. The tax holiday, which had been due to expire at the end of February, saves the average worker an estimated $80 a month, according to budget officials; extending it will cost the Treasury about $100 billion. House and Senate negotiators agreed to find some $50 billion in spending cuts to offset the effects of the deal, which also includes an extension of unemployment benefits, on the federal deficit. The compromise, for which both parties claimed victory, was brokered by Sen. Max Baucus (D-Mont.) and Rep. Dave Camp (R-Mich.).