Republicans unveil plan to extend payroll tax cut

By: Jill Jackson
Topics: Congress

House Speaker John Boehner, flanked by Rep. Cathy McMorris Rodgers, R-Wash., left, House Majority Leader Eric Cantor, R-Va., speaks to reporters on Capitol Hill, Nov. 30, 2011, following a closed-door meeting.

(Credit: AP Photo/Susan Walsh)

Senate Republicans unveiled an extension of the payroll tax holiday today that they say would decrease the deficit by $111 billion and ensure that Americans don't see a tax hike for another year.

Their plan would extend the payroll tax holiday for one year and pay for it by preventing the wealthy from receiving unemployment insurance or food stamp assistance and require millionaires to pay full Medicare premiums. It would also freeze federal workers' pay for three years and reduce the size of the federal workforce by 200,000.

The move came as the Senate is poised to take a procedural vote on the Democratic plan as early as tomorrow.

Individuals are normally taxed 6.2 percent to pay for Social Security and Medicare. Congress cut that contribution by 2 percent last January as part of the compromise extending the Bush tax cuts.

The Senate Democrat's plan would extend the payroll tax for another year and expand it so that individuals would only pay 3.1 percent. That would cost $265 billion, but would be paid-for with a 3.25 percent tax on anyone making over $1 million.

Senate Majority Leader Harry Reid said today that the bill would "cut taxes for 92% of American families and every single business in the nation without adding a penny to the deficit." But he said the package "may not get a single Republican vote because it will cost a few incredibly prosperous, rich Americans about two weeks of pay."

Republicans argue that taxes should not be hiked on anyone during a recession and that taxing the wealthy would hurt job creation.

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Senate Republican Leader Mitch McConnell, R-Ky., said on the Senate floor today that "the debate we're having this week is not about whether to extend this temporary leave for millions of working Americans out there who are struggling as a result of the ongoing jobs crisis." He said "It's about whether we should help those who are struggling in a bad economy by punishing the private-sector businesses that the American people are counting on to help turn this economy around."

In the House, passing the payroll tax holiday could prove even more contentious than in the Senate because many House Republicans aren't sure that the tax cut should be extended.

According to a GOP aide at a House Republican Conference meeting this morning, members had concerns ranging from the long-term impact of taking that money from the Social Security Trust Fund to setting the precedent of offsetting tax cuts.

The aide said that Speaker John Boehner and Majority Leader Eric Cantor were firm that the payroll tax break should be extended since Republicans should be consistent in support of tax cuts.

After the meeting, Boehner told reporters asking about the costs of the extension that "you can take to the bank the fact that they will be paid for."

The payroll tax holiday currently expires at the end of the year along with long-term unemployment benefits and popular tax breaks for businesses.

Jill Jackson
Jill Jackson is a CBS News senior political producer.
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by Paul_I December 1, 2011 1:33 PM EST: What a bargain! Under the GOP plan, we can retain a tax cut today if we force Federal workers to not have salary increases for three years and fire 200,000 workers. Should the Dems counteroffer to retain the tax cut for all Americans and pay for it by taxing 100% of all income over the 2011 adjusted gross income reported on their tax return for the next three years? And, to further reduce costs, all members of Congress will have to reduce their staff by 50% plus all Congressional benefits and perks from lobbyists should be taxed at fair value.; Reply to this comment


by Bisk1 December 1, 2011 11:53 AM EST: Their plan would extend the payroll tax holiday for one year and pay for it by preventing the wealthy from receiving unemployment insurance or food stamp assistance and require millionaires to pay full Medicare premiums. It would also freeze federal workers' pay for three years and reduce the size of the federal workforce by 200,000.

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Can any Repug tell me who's really killing Jobs ??; Reply to this comment


by realist51 December 1, 2011 10:11 AM EST: How simply pathetic for the republicant's to even offer up such a down right stupid idea's proposal. Really now! all of a sudden a tax cut has to be paid for! Well Mitch, and Mr. Bohner better get damn busy figuring where the he(( there going to get the 4.9 trillion from the UNPAID for tax cuts they voted for in 01 and 03.The dems need to shove this down there throats. Really O'Connell eliminate 200,000 jobs and freeze wages. ? Right here is a good reason the people of Kentucky need to jack this guys wagon right out of office.; Reply to this comment


by dante805 December 1, 2011 8:15 AM EST: Ok...its getting old now. When will the GOP stop insisting on not raising taxes on the multi-millionaires. So make millions suffer rather than make a few thousand take an inconsequential hit. Amazing. Come on lets get real tax the 1% ers like NBA stars and Actors. They can afford it. Just exempt any small business owners. Simple!; Reply to this comment


by euge005 December 1, 2011 7:00 AM EST: So in GOP speak, they keep millionaires off food stamp, big saving that. And avoid taxing them but 200,000 people that work for a living lose their jobs. A couple million more get the shaft & lose Colas for 3 years. And he has the guts to stand in front of a camara and pretend that does not hurt the economy more than the non-existent benefits of keeping low taxes on the super rich, the ones he calls job creators. Hey Gomer, when will we seem those jobs? Oh, say what? They are in China. Should have known. What was your cut this time?; Reply to this comment


by lexingtonlady December 1, 2011 1:20 AM EST: So the bill to hopefully make jobs will be paid for by firing 200,000 people? Republicans need to be fired.; Reply to this comment


by radsenior December 1, 2011 12:07 AM EST: Congressional gridlock caused by these five biggest failures: Mitch McConnell, John Boehner, Eric Cantor, GroverNorquist and Paul Ryan. Senate Republican leaders introduced a bill that would keep the payroll tax rate at its current level for another year. The cost is roughly $120 billion. Senate Republicans would offset most of the cost by freezing the pay of federal employees through 2015 and gradually reducing the federal work force by 10 percent. In addition, Senate Republican leaders would go after "millionaires and billionaires," not by raising their taxes but by making them ineligible for unemployment compensation and food stamps and increasing their Medicare premiums. These TEA-GOP-Republicans will stop at nothing to protect the top 1%-ers! Speaker John A. Boehner said Wednesday that he was "interested in working with the president to find common ground" on the payroll tax cut. He said the tax break must be paid for, but not with a surtax on high income. There is no compromise with the TEA party led GOP in Congress or around the country. America needs to take back their governments , locally, on the state level and nationally. These TEA-GOP-Republicans are the same TEA-GOP-Republicans who have taken a pledge to puppeteers like Grover Norquist, Bob Vander Plaats, Edward H Crane and David Keene, and other puppeteers, rather than honor their commitment to the constituents in their respective districts.; Reply to this comment


by tsigili November 30, 2011 11:33 PM EST: Should be cutting federal workers pay......since they aren't doing muhc, especially in the WH and Congress.; Reply to this comment

by payback108 November 30, 2011 8:45 PM EST

200,000 federal fata-- off the payroll sounds like a good start

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by Progress4USA November 30, 2011 9:20 PM EST: Adding to the nation's unemployment is not a good idea sport...those folks put money into the economy.


by Progress4USA November 30, 2011 7:47 PM EST: It would also freeze federal workers' pay for three years and reduce the size of the federal workforce by 200,000.
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Looks like a jobs killing bill to me!!!! Sorry GOP, go back and color another picture.; Reply to this comment