Lawmakers Get Tentative Deal on Payroll Tax, Jobless Benefits

The agreement contains a complicated formula for long-term jobless benefits that would allow both Democrats and Republicans to declare victory. The maximum number of weeks to collect unemployment benefits, currently at 99, would gradually fall to 73 by year's end, according to congressional aides.

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Congressional Democrats had been pushing to keep the 99-week maximum for jobless benefits because millions of Americans are still struggling to find jobs, while Republicans wanted a 59-week cap. A 79-week compromise has been proposed by Obama.

Details of the accord were outlined late on Tuesday to Republican House members. A senior House Republican aide told Reuters the deal's fate was still unclear.

Following the meeting of House Republicans, some balked at adding $100 billion to U.S. deficits by not covering the cost of lost revenues associated with extending the payroll tax cut through Dec. 31. "What I heard I don't like," Representative Phil Gingrey told reporters.

But many Republicans seemed resigned to the deal's passage.

"I think the mood [of House Republicans] was to get it off the table," freshman Representative Dennis Ross said.

If the Republican-controlled House passes the bill, it still would have to be approved by the Democratic-controlled Senate.

Barring last-minute hitches, the deal would end a battle that has raged in Congress for months over the effectiveness of the payroll tax cut in stimulating the economy and extending long-term unemployment benefits amid an 8.3 percent national unemployment rate.

Democrats tout both measures as important to short-term economic growth at a time when the economy is showing signs of strengthening. The tax cut and jobless benefits could pump around $130 billion into the economy over the next 10 months.

The payroll tax cut has sown division among Republicans, many of whom have questioned its economic benefits, and it has left the party vulnerable to Democratic attacks that it favors tax cuts for the wealthy but not for middle-class Americans.