Payroll Tax Package Deal Could Be Imminent, Including Pay-Fors

Nothing is final, but aides and insiders say that a deal for year-long extensions of the payroll tax cut, unemployment insurance and Medicare physician payment rates could be near. The payroll tax cut is set to be extended without offsets, while UI and the “doc fix” are poised to be paid for.

The situation remains fluid, but as of now, the roughly $35 billion “doc fix” is expected to be offset with health spending cuts elsewhere in the budget, health care insiders tell TPM. They include cuts to the Affordable Care Act’s prevention fund as well as reductions in Medicare payments to hospitals (including bad debt and pay bumps for hospitals with lots of low-income patients) and nursing homes.

At a cost of $20-25 billion, extension of unemployment compensation is likely to be paid for in part with cuts to federal employee retirement benefits and spectrum auction, an aide said.

That’s what’s being discussed now. We’ll be following as the story develops.