Both houses of Congress voted Friday to approve an extension of the payroll tax cuts that were due to expire at the end of the month. The bill also extends unemployment benefits and delays a mandated cut in pay for Medicare physicians.
The House voted 293 to 132 in favor of the $143 billion measure, with the vote in the House quickly followed by a 60 to 36 vote in the Senate.
The legislation had stronger support in the House, where 146 Republicans and 147 Democrats voted in favor of the bill. In the Senate, five Democrats and 31 Republicans voted against the measure.
Commenting on the approval of the bill, Senate Majority Leader Harry Reid, D-Nev., said, "More than 160 million American workers will keep more of their hard-earned money in their pockets this year thanks to this bipartisan compromise."
"More than four million unemployed Americans will continue receiving checks that help them pay the rent and buy groceries while they look for a job, and millions of seniors on Medicare will continue to have access to their doctors," he added.
The votes in favor of the legislation came after Republicans agreed to drop demands that the cost of extending the payroll tax cuts be offset by spending cuts in other areas.
While the cost of the bill is partly offset by broadband spectrum sales, increased pension contributions by new federal employees, and cuts to Medicare hospital and specialist fees, the legislation is still expected to increase the federal deficit by $89.3 billion over the next ten years.
A number Republicans voted against the bill due to their vehement opposition to any measures that would increase the deficit.
Several Democrats from Maryland and Virginia, whose districts are home to many federal workers, also voted against the legislation in protest of the increased pension contributions by new federal employees.
House Speaker John Boehner, R-Ohio, expressed support for the passage of the legislation but also used the occasion to take a shot at President Barack Obama.
"Let's keep in mind that aside from the spectrum provisions that have long been a part of the Republican jobs plan, this is an economic relief bill - not a growth bill," Boehner said.
He added, "The only reason the provisions at the core of this measure are even necessary is because the president's economic policies have failed."
While the bill extends unemployment benefits, the length of time someone can receive unemployment help is reduced to either 73 weeks or 63 weeks, depending on the unemployment rate in their state.
Additionally, the legislation allows states to perform drug tests on people applying for unemployment benefits if they lost their job due to drug use or if they are seeking a job that would require a drug test.
The House and Senate approved a two-month extension of the payroll tax cuts in December after failing to reach an agreement on a longer-term extension.
The payroll tax cuts reduce the tax to 4.2 percent from 6.2 percent, saving the average middle-class family about $1,000 a year.
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May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.