House GOP Blinks: Congress Passes 60-Day Payroll Tax Cut

Feeling the heat from both sides of the political aisle, House Republicans ended a deadlock on a two-month extension of the payroll tax cut, pushing negotiations for a one-year deal until after the holidays.
The Senate and House approved the $33 billion measure to keep the payroll tax rate at 4.2 percent through February. It had been scheduled to increase on January 1 to 6.2 percent for 160 million Americans.
If Congress had failed to extend the payroll tax cut, the typical family making $50,000 a year would have had about $40 less to spend or save with each paycheck, the Obama administration said.
The $33 billion price tag would be paid by an increase in fees on mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).
The fee hike would be good for the life of new mortgages and refinancing – about 90 percent of U.S. mortgages are financed or backed by the government-sponsored companies. Existing mortgages are not affected. The fee would rise about 0.1 percent to an average of 0.3 percentage point.
The new mortgage fee hike would amount to about $15 a month more on a  $200,000 mortgage ­– that’s $180 a year. But analysts say it should not derail the already dismally-slow housing market recovery.

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