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BY VICTORIA CRAIG
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President Obama gave Congress a Scrooge-like ultimatum Friday after the Senate failed to pass an extension of a one-year payroll tax cut: Come to an agreement or spend Christmas at the Capitol. San Francisco’s KTVU has the details.
“Part of Obama’s jobs plan suffered a setback in the US Senate last night. Democratic and Republican plans to extend a two percent payroll tax cut were rejected. President Obama has said working families will see their paychecks go up by about $1,000 next year if this tax cut is allowed to expire.”
The biggest item of contention for the Senate was how to pay for the bill. As Politico explains, because the Republican and Democrat versions of the plan had very different ideas, both were doomed to fail.
“The Senate failed ... to move forward on the payroll tax cut favored by Democrats – legislation that never had a chance because of the GOP’s opposition to the millionaires’ surtax put in place to pay for the tax cut. Shorty after, the Senate rejected a Republican-led measure … that would have paid for a payroll tax-cut extension by freezing federal workers’ pay and cutting other discretionary spending.”
Fox Business’s Charles Payne says forget about income class - the key to solving the problem is to extend tax cuts to more Americans-- not increase them for a select few.
“Why not give all hardworking Americans-- and forget about what economic class they’re in -- a tax cut? Why not give businesses a tax cut? And also, the president talked about the $40 billion businesses would save, I don’t know if you want to tax them, but how about letting American businesses bring money back from overseas? There’s almost two trillion dollars sitting overseas offshore. If they were to lower taxes, a lot of that money would come back.”
On CNBC, economist Robert Reich agrees... kind of... saying the best way to solve the problem is to avoid raising taxes.But he also says if the payroll tax cut extension couldn’t be paid for any other way, money from the wealthiest Americans makes the most sense.
“I don’t think the issue is millionaires versus everyone else. I think the real issue here is the importance of extending the payroll tax cuts and also unemployment insurance because you don’t want any additional fiscal drag on the economy.”
Even though the two proposals failed in the Senate, the House isn’t ready to let the issue die. As The HIll reports, House Republicans met Friday morning to craft their own plan for a tax break proposal.
“The measure could hit the House floor as early as next week... Speaker John Boehner has set a Dec. 16 adjournment date, meaning lawmakers have about two weeks to complete a long list of business including the Medicare ‘doc fix’ and expiring tax extenders... On Wednesday, Democrats said they are willing to consider a variety of options to pass a bill.
The current tax cut for this year lowers a worker’s share of the Social Security payroll tax from 6.2 percent to 4.2 percent. Unless Congress can come to an agreement on whether to extend it, the tax cut will expire December 31.
