As the drama of the payroll tax holiday continues, we’re going to try and catch you up:

What happened:  In December 2011, a conference committee was created to resolve the difference between the House and Senate versions of the payroll tax holiday extension.  Yesterday, a majority of members of the conference committee signed the conference report, which sends the modified bill to the House and Senate.  This bill would extend the two-month extensions for the remainder of the year for the following:  the payroll tax holiday, Medicare’s payment to doctors, and long-term emergency unemployment benefits (although the maximum time someone could receive benefits would fall from 99 weeks to 73 weeks).  Part of the bill would be paid for with auctioning broadband spectrum, increasing what future federal employees pay for pension benefits, among other miscellaneous pay-fors.  However, overall the bill would add $101 billion to the deficit in fiscal year 2012 and $89 billion over fiscal years 2012 through 2021.

What’s next:  The conference report will be voted on at some point today in the House and is expected to be considered in the Senate soon thereafter.

What it means:  If the payroll tax cut isn’t renewed by the end of this month, Americans will see their Social Security taxes rise from 4.2% to 6.2% starting in March. Other important  provisions are also wrapped up in the discussions including unemployment benefits and Medicare payments to doctors, among others.

BA