Senate plans payroll break
Democrats say bill is a compromise
WASHINGTON – Senate Majority Leader Harry Reid will announce a new proposal today to extend a payroll tax cut for 160 million U.S. workers, a Democratic ally said.
Sen. Kent Conrad, D-N.D., would not reveal the specifics of the proposal but said “it will be paid for” and will represent a compromise on Republican and Democratic plans the Senate voted on last week. Neither had the votes to pass.
A spokesman for Reid said the Nevada Democrat was reviewing the proposal with his caucus and had no comment.
Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, R-Ky., said McConnell didn’t know anything about a new proposal.
“This ‘compromise’ is as big of a surprise to us as it is to everyone else,” Stewart said.
Congress has been split on whether to renew the tax cut, which gives workers a break of 2 percentage points off the 6.2 percent rate they usually pay.
Democrats want to extend the tax cut for employees and also cut the taxes paid by employers. They would pay for the proposal by raising taxes on income exceeding $1 million.
Their proposal failed to get the 60 votes required to overcome a filibuster last week. A Republican measure that would have paid for the tax cut with spending reductions also failed.
Although Republican leaders say they want to extend the tax cut, many Republican legislators say the tax cut is a gimmick that does little to boost the economy and compromises the Social Security trust fund.