According to Wall Street Journal –
The fiscal cliff deal reached by the White House and Senate Republicans wouldn’t extend the payroll-tax holiday. The biggest hit to 2013 growth appears likely to come from this tax break’s expiration on Monday. The workers’ share of the Social Security payroll tax had been lowered by two percentage points for the past two years, to 4.2% from 6.2%, amounting to an annual income boost of $1,000 for a typical U.S. family earning $50,000 a year. It provided an increase of as much as $2,202 this year for a worker earning $110,100, the maximum wage subject to the payroll tax.
COLAs: The final compromise avoiding the fiscal cliff does not include a switch to a less generous formula for computing retirees’ annual cost-of-living adjustments. Before Christmas, House Speak John Boehner, R-Ohio, and President Obama reportedly agreed to replace the current formula with what’s known inside the Beltway as the chained CPI. That would have resulted in lower COLAs for retirees, including federal and military retirees, over time. It almost made it into the final deal,
New federal hires: Federal employees hired after Dec. 31, 2012, and those with less than five years of federal service rehired after that date, must pay an additional 2.3 percent into their pensions, bringing their total pension contributions to 3.1 percent. Current feds are protected for now from having to contribute more to their defined retirement benefit, but there is Republican and Democratic support for eventually making federal pensions less generous.
Thrift Savings Plan and federal taxes: The Senate on Tuesday approved House-passed legislation that would allow the Internal Revenue Service to tap Thrift Savings Plan accounts to collect unpaid federal taxes.