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Congress passes payroll tax cut plan

WASHINGTON — The Congressional fight over extending a payroll tax credit appears to be over, with lawmakers passing a compromise deal on Friday.

The plan will extend a 2 percent cut in the payroll tax through the end of the year, as well preventing a decrease in Medicare payments to doctors and extending unemployment benefits (but cutting the length of time jobless Americans receive them).

Only three Minnesotans voted against the plan: Michele Bachmann, and Collin Peterson, who were cool to extending the tax break in the first place, and Keith Ellison. President Obama, who had made extending the tax cut one of his top priorities this year, is expected to sign the plan into law soon.

The average Minnesotan will save $525 a year because of the extension. Total, the $100 billion deal will reduce taxes for nearly 160 million people.

The bill also caps the length of time unemployed workers can receive federal unemployment benefits from the Emergency Unemployment Compensation and the Extended Benefits programs, from a maximum of 99 weeks in some states to 73 weeks by this fall. This shortened time period will have little affect on Minnesota, since the state’s three-month unemployment rate of 6.4 percent disqualified it from receiving the extended benefits in mid-January. That cut off an additional 13 weeks of benefits for 7,000 unemployed workers, stopping benefits after 73 weeks.

Gov. Mark Dayton had asked for a change in federal policy allowing an extension of the emergency benefits while the unemployment rate says above 5.5 percent. That did not happen.

Devin Henry can be reached at dhenry@minnpost.com.

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