February 14, 2012 in Nation/World

GOP relents on payroll tax

House leaders open to continuing cut
Andrew Taylor Associated Press
 
Extending aid

The move still would leave it to negotiators to come up with as much as $40 billion in deficit savings to extend jobless benefits averaging about $300 a week to people who have been out of work for more than six months.

WASHINGTON – In an abrupt about-face, House GOP leaders announced Monday that they are willing to extend the two percentage point cut in the payroll tax through the end of the year and add the approximately $100 billion cost to the nation’s $15 trillion-plus debt.

House Speaker John Boehner, R-Ohio, Majority Leader Eric Cantor, R-Va., and GOP Whip Kevin McCarthy of California said the House could vote on the payroll tax measure this week, but that the fate of unemployment benefits for millions of the long-term jobless and efforts to forestall a scheduled cut in fees to doctors who treat Medicare patients would remain in the hands of a House-Senate negotiating panel that’s looking for ways to pay for them.

The GOP statement came after intense talks this weekend failed to produce an agreement. Republicans were pressing for pay cuts for federal workers and requiring them to contribute more to their pensions. They recoiled at a Democratic proposal to raise Transportation Security Administration per-ticket airline fees.

“Democrats’ refusal to agree to any spending cuts in the conference committee has made it necessary for us to prepare this fallback option to protect small business job creators and ensure taxes don’t go up on middle-class workers,” the GOP leadership statement said.

Without action by Congress by the end of the month, payroll taxes will rise for 160 million Americans. The two percentage point tax cut delivers about $20 a week to a worker making $50,000 a year and a tax cut totaling $2,000 this year for someone making $100,000.

Democrats were encouraged and said the development could break an impasse over the payroll tax proposal and the other expiring provisions.

“We’ve been making the point that when (it comes to) tax cuts for folks at the very top, the House Republicans went to great lengths to change their rules to say you don’t have to pay for those,” said Rep. Chris Van Hollen, D-Md. “And yet they’ve been saying that when it comes to a short-term, 10-month payroll tax cut for middle-income people all of a sudden you have to pay for it.”

“This is a major step forward in these negotiations,” said Sen. Charles Schumer, D-N.Y.

But Democrats also warned that decoupling the payroll tax from the larger legislation could jeopardize efforts to renew the jobless benefits and the fix to the Medicare payment formula.

“It’s completely irresponsible to leave behind nearly five million unemployed Americans whose benefits will expire and 47 million seniors and disabled Americans whose access to health care would be jeopardized,” said Rep. Sander Levin, D-Mich., a member of the 20-lawmaker House-Senate negotiating panel.

© Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Three comments on this story so far. Add yours!

  • DickAdams on February 14 at 6:39 a.m.

    Its encouraging but I`m wondering why the democrats added a warning saying,
    “But Democrats also warned that decoupling the payroll tax from the larger legislation could jeopardize efforts to renew the jobless benefits and the fix to the Medicare payment formula.”
    I don`t think waving a red flag when the GOP did a 180 degree, even surprising, Sen. Charles Schumer, was necessary. And Rep Levin, D-Michigan, adding his 2 cents worth, with fighting words regarding “disabled Americans health care would be jeopardized”. Is their anybody who believes our wonderful country would stop caring for disabled Americans?? Photo-op, etc. Another career politician with a big mouth that needs to kick cans down the road. I can remember a long time ago, Levin did a decent job representing all Americans.

  • Spokane_Citizen on February 14 at 6:40 p.m.

    Dick, there are plenty of Americans who believe that this country would have no problem not caring about disabled Americans. I’m old enough to remember the ease at which they decided to not care about disabled Vietnam veterans, who they readily ‘kicked to the curb’.

  • Pigrobin on February 14 at 7:02 p.m.

    Good deal!! Add it to the debt. More importantly, we continue down the road of making social security a welfare program. Live for today kids, sorry about the future we’re leaving you.

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