CQ TODAY ONLINE NEWS
Dec. 2, 2011 – 9:41 p.m.
GOP Objections Muddle Payroll Efforts
By Ben Weyl and David Harrison, CQ Staff
Surprisingly solid Republican opposition to preserving this year’s payroll tax cut may complicate efforts by the leaders of both parties to prevent what will be seen as a $1,000 tax increase on most American workers on Jan. 1.
The Social Security payroll tax cut expires this month, as do long-term unemployment benefits and protections for Medicare payments to doctors.
In the midst of a still-dismal economy, many lawmakers want to renew these popular programs. But time is running short, and GOP resistance in both the House and Senate makes the outcome far from certain.
On Dec. 2, Speaker
Boehner’s setback came a day after a majority of Senate Republicans voted against a proposal spearheaded by Minority Leader
Under last December’s tax deal (PL 111-312), which extended tax cuts enacted under President George W. Bush through 2012, the employee-paid share of the Social Security tax was temporarily reduced to 4.2 percent from 6.2 percent.
President Obama and congressional Democrats want to reduce the employee share of the payroll tax to 3.1 percent for 2012 and cut the employer share to 3.1 percent from 6.2 percent for the first $5 million of a company’s wage costs.
Republican leaders in the House and Senate oppose such an expansion and instead favor a simple extension of the current tax cut. A potentially larger conflict looms between Democrats and Republicans over how to finance whatever extension Congress fashions.
Last week, by a vote of 51-49, the Senate blocked a Democratic proposal (
The GOP tax cut alternative endorsed by McConnell (
Democrats are trumpeting what they say is a GOP refusal to support a tax cut for middle-class workers. And Senate Democratic leaders are considering a new payroll tax cut extension effort this week to keep the heat on Republicans. In part, the new effort grows out of Collins’ defection, said a senior Democratic aide.
Appealing to Conservatives
At last week’s caucus meeting, Boehner repeated what has become a familiar scene involving GOP lawmakers who do not want to follow their leaders’ plans when it comes to fiscal matters.
GOP Objections Muddle Payroll Efforts
Republican leaders laid out roughly 10 potential options to offset the cost of the tax cut, jobless benefits and physician payment package, including many proposals developed during deficit reduction talks earlier this year.
Rep.
During the meeting, many rank-and-file lawmakers made clear they were displeased with the leadership proposal.
“Most of the people standing up were troubled with moving ahead with this,” said Arizona Republican
Party leaders said they would work on a proposal this past weekend based on members’ reactions, with the hope of producing a bill by early this week, said Rep.
To appeal to skeptical lawmakers, GOP leaders proposed incorporating pieces of the party’s energy agenda into a single year-end measure that extends the payroll tax cut, renews benefits for long-term unemployed workers and prevents a scheduled Medicare payment cut for physicians, known as the “doc fix.”
The energy items might include a delay in company compliance with a rule that mandates “maximum achievable control technology” for industrial boilers and a removal of barriers to construction on the Keystone XL pipeline.
“They want to try and roll up the payroll tax, extend unemployment benefits, Keystone XL, boiler MACT and doc fix all in one,” said
These steps may not be enough to bring along many conservatives who say they resent being asked to extend tax and benefit provisions that were meant to be temporary. Conservative say they are also worried about not funneling owed taxes to the Social Security trust funds and object to the idea that current spending will be offset over 10 years.
“It’s kind of like the Wimpy thing: I will gladly pay you tomorrow for a hamburger today,” West said, referring to the “Popeye” character. West said he would oppose an extension of the tax cut.
Other Republicans tried to downplay the party divisions at last week’s session, which Ways and Means Chairman
Freshman
Democrats See an Advantage
GOP Objections Muddle Payroll Efforts
At a Dec. 2 news conference, House Minority Leader
And although Democrats might prefer not to offset the cost of the extension, Pelosi said, House Democrats would support financing it. To do so, however, she suggested counting savings from the drawdown of troops in Iraq and Afghanistan, an idea that Boehner has publicly ruled out.
While the political posturing goes on, aides to House and Senate leaders say progress is being made behind closed doors toward an agreement that would renew the tax cut and jobless benefits, and address the Medicare payment system.
House Minority Whip
“We are prepared to cooperate,” Hoyer said.
Added Pelosi, “We cannot go home for Christmas unless we pass this legislation.”
Sam Goldfarb, Alan K. Ota and Frances Symes contributed to this story.