Politics

Democrats Pressure GOP to Extend $20 a Week Payroll Tax

Democrats yesterday intensified their pressure to extend President Barack Obama’s payroll tax holiday and began laying the groundwork for a campaign theme that Republicans won’t support tax cuts for the middle class.

Senate Majority Leader Harry Reid (D.–Nev.) said their new plan to extend the average workers’ paychecks by less than $20 a week would be paid for by cutting benefits for the wealthy and by raising taxes on millionaires.

“It seems the only place in the country you can’t find a majority of Republicans willing to speak up for shared sacrifice is the United States Senate,” Reid said. 

“Republicans in Congress dismiss it at their peril. The American people are watching.”

As Reid made his announcement on the Senate floor, Obama simultaneously addressed reporters at the White House and criticized Republicans for insisting the tax break be paid for.

“I know many Republicans have sworn an oath never to raise taxes for as long as they live,” Obama said. “How can it be the only time there’s a catch is when it comes to raising taxes on middle class families?”

The payroll tax on 160 million workers is used to fund Social Security, but was reduced last year as part of Obama’s jobs agenda.

However, some Republicans say the tax cut hasn’t produced a single job and many are hesitant to extend it.

“With the long list of things Congress has to get done by the end of the year and the clock ticking, it’s pretty mystifying that the majority is pursuing more political show votes that won’t go anywhere,” said Sen. Orrin Hatch (R.–Utah).

Sen. Jon Kyl (R.–Ariz.) called the extension “bad economic policy” and “bad tax policy,” but signaled that with the right spending offsets, Republicans would be willing to compromise.

“There are reasons to be very skeptical about the continued payroll tax holiday. This is what pays for Social Security. We cannot leave Social Security holding the bag,” Kyl said.

“Because you’re having to take it out of the Social Security trust fund, you need to replenish that fund. You need to pay for it,” Kyl said.

House Republicans are expected to roll out their own plan later this week to consider the tax cut extension with their own offset proposal.

Sen. Bob Casey (D.-Penn.), sponsor of the legislation introduced Monday, said Republicans should support his $185 billion plan because it is “fully paid for and includes measures that have received bipartisan support in the past.”

“We can no longer afford to jeopardize working families in order to protect the wealthiest few,” Casey said.

The Democrat’s tax cut would be paid for by levying a 1.9% surtax for ten years on those whose incomes gross more than $1 million, and includes a Republican proposal to cut off unemployment benefits and food stamps to millionaires.

Reid said that Republican opposition would “have an immediate, negative impact on our economy. It will halt our still-fragile recovery in its tracks, and drag us back into recession.”

“We all know Congress can’t afford to play chicken with the economy. That’s why Democrats are committed to passing this payroll tax cut,” Reid said.

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