Republicans in the U.S. Congress on Tuesday threw their support behind a payroll tax cut extension, trying to blunt charges ahead of 2012 elections of favoring wealthy Americans over middle-class workers.
Until Tuesday, Republicans had been lukewarm on extending President Barack Obama's payroll tax cut for workers, indicating they were open to negotiating it but never explicitly backing a measure, which the White House says will boost the country's sputtering economic recovery.
The move by Republicans could help avert an end-of-year battle with Democrats after months of bitter budget battles that brought the country to the edge of default in August and cost it its coveted AAA rating from Standard & Poor's.
Though he no longer has to worry about his re-election, Sen. Jon Kyl (R-Ariz.) isn't moderating his views. The Arizona Republican, who is retiring from office in 2012, said on Sunday that he would oppose an extension of the payroll tax cut, which is set to expire at the end of this year.
"The payroll tax holiday has not stimulated job creation. We do not think that is a great way to do it," Kyl said on "Fox News Sunday."
"In all likelihood we will agree to continue the current payroll tax relief for another year," Senate Republican leader Mitch McConnell said after a closed-door meeting of his colleagues.
McConnell said there was now "a majority sentiment" among Republicans for continuing the temporary tax cut.
Indeed in the Senate, where the fight over the payroll tax break began this week, Republican support for the extension is growing, as long as it is paid for in a way that passes muster with the party. Democrats introduced legislation that would pay for the extension — which would also lower the portion of the tax paid by employers, at a cost of roughly $115 billion — with a 3.25 percent surtax on income over $1 million, an idea Republicans have already rejected. Democrats openly acknowledge it is little more than a stunt to emphasize the vast policy divisions between the parties.
Senator Pat Roberts, Republican of Kansas, said his party’s plan could involve a small increase in taxes for some high-income people who meet certain criteria.
Alrighty then, get back to us when you figure it out. It's nice to see the Republicans squirm a bit, but this could easily flip back to them making unreasonable demands and then proclaiming that it's the Democrats who are blocking progress.
Unemployment benefits are being mentioned in these stories as well - without an extension of both of these items, the economy takes a hit of anywhere from 1-1.5% of GDP and an estimated 500,000 jobs lost.
And right on cue, here comes the plan... freeze federal employee pay for an extended two years (which was already frozen for the next two years starting last January 1st), and means test Social Security and Medicare for those making over $1 million a year. Like Digby said:
So we have some typically cynical kabuki going on in DC over the extension of the payroll tax cut.(I personally wish we would just send out government checks instead of enacting payroll tax cut because inevitably people are going to start complaining that SS is draining the treasury and has to be cut. But then, they're already doing that so I guess we've lost that battle.)
Anyway, here's the latest from dday. He says that for all the happy talk from McConnell about passing it, it appears the plan is to demand something odious in return to pay for it and then blame the Democrats for raising taxes when they refuse. (Sound familiar? It should, it worked beautifully last December. Look for them to hold up the Unemployment extension too, just for kicks. It's Christmas. They deserve a little fun.)
'Tis the season for cynicism. Watch them take this to the last second to see how much they can get from the Dems.