House GOP: Let’s Extend The Payroll Tax Without Pay-Fors
House Republicans are now offering to extend the Payroll Tax Cut without offsetting spending cuts or tax increases, which has been the issue holding up an extension since December:
Feb. 13 (Bloomberg) — Congressional Republicans are offering to drop their demand to finance a 10-month extension of the payroll tax cut with spending reductions, three aides of both parties who are familiar with the talks said today.
The Republican proposal reflects the desire to avoid being blamed for an impasse, as they were for a breakdown in talks that almost caused the tax break to expire at the end of December, said one of the staffers, a Republican leadership aide who spoke on condition of anonymity.
Democrats have proposed a surtax on the income of those earning more than $1 million a year. The Republicans’ proposal is an attempt to defuse the tax issue, the Republican aide said.
This offer doesn’t include the extension of unemployment benefits, which would still have to be paid for in some way, but it’s an interesting offer politically since it essentially puts the ball firmly in the Democrats court.
“We support the work of our conference negotiators and continue to support a responsible resolution that extends current payroll tax relief, reforms and extends unemployment insurance, and includes a Medicare ‘doc fix.’ Republicans have attempted to reach an agreement and negotiated in good faith for months, and we will continue to do so. Unfortunately, to date, Democrats have refused virtually every spending cut proposed – insisting instead on job-threatening tax hikes on small business job creators – and with respect to the need for an extension of the payroll tax cut, time is running short.
“Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue regarding offsets, unemployment insurance, and the ‘doc fix.’ If Democrats continue to refuse to negotiate in good faith, Republicans may schedule this measure for House consideration later this week pending a conversation with our members. 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.
“This is not our first choice. Our goal is to reach a responsible agreement in conference. But in the face of the Democrats’ stonewalling and obstructionism, we are prepared to act to protect small businesses and our economy from the consequences of Washington Democrats’ political games.”
Leaving aside the partisan rhetoric, which is to be expected, it does put the Democrats in an interesting position vis a vis the Payroll Tax Cut.