Most Read: Politics

Read In

Now Viewing: People from around the country looking at Post Politics section

See what's being read across the country ›
2chambers
Posted at 03:29 PM ET, 12/08/2011

Democratic, Republican payroll tax cut extension plans both blocked by Senate

The Senate blocked consideration Thursday of both Democratic and Republican plans to extend the payroll tax cut, as the partisan stalemate over the issue continues.

The Democratic measure, which would cut the 6.2 percent payroll tax in half next year, was blocked on a 50 to 48 vote; 60 votes were necessary for the bill to proceed. It would have imposed a new surtax on the wealthy.

The dueling Republican proposal would have ensured the payroll tax rate, set at 4.2 percent for the last year to give workers a boost in the tough economy, would not revert to 6.2 percent in January.


Senate Majority Leader Harry Reid of Nev. makes a statement on Capitol Hill in Washington, Tuesday, Dec. 6, 2011, after a Democratic policy luncheon. (Evan Vucci - AP)

The GOP plan would pay for the cut with a pay freeze for government workers, federal layoffs and higher Medicare premiums for wealthy seniors.

The Republican measure was blocked on a 22 to 76 vote, as a majority of senators in both parties opposed it.

The Senate votes come as House Republicans rally their members around a GOP alternative that would package a payroll tax cut with the one-year extension of benefits for the unemployed and a host of other measures, including a provision aimed at speeding up work on the Keystone XL oil pipeline.

The goal was to lure the support of conservatives wary of extending what had been intended to be a one year cut in the payroll tax.

Fearful of handing President Obama an election year issue by allowing the payroll tax cut to expire, Republicans leaders have been struggling to get support from their own members for extending the tax cut.

Democrats believe the tax cut could help stimulate the economy by giving consumers more of their paychecks to spend. But many Republicans believe it’s a short-term gimmick that will not spur economic development and would complicate efforts to do a total rewrite of the tax code that would result in lower rates.

The outcome of Thursday’s Senate votes were not in question. Indeed, the Senate rejected similar partisan measures a week ago.

But Democrats hoped to press what they see as a political advantage on the tax cut issue by forcing another vote on the issue.

Their $185 billion measure was scaled back somewhat from the $265 billion bill considered last week. It would have expanded the tax cut that has been enjoyed by workers this year, but it dropped a provision included in last week’s bill to extend tax relief to employers as well.

And it cut a surtax on those making more than a million dollars a year from 3.25 to 1.9 percent. Still, Republicans reject using a millionaire’s surtax to replenish Social Security accounts, which are funded through payroll taxes paid by workers and their employers.

Senate Republicans put forward their measure to allow their members a way to back a payroll tax cut without supporting a new millionaires’ surtax. But only 20 Republicans voted to advance the measure last week and, on Thursday, that number rose by only two.

With the defeat of the Senate measures, attention returns to the House, as Speaker John A. Boehner (R-Ohio) will next week attempt to muster support from his caucus to muscle his bill over to the Senate.

Even if successful, however, key provisions will likely be rejected by Senate Democrats.

Extension of the payroll tax cut and unemployment benefits will require a broad bipartisan compromise for passage that is so far eluding both parties.

President Obama said Thursday that he will delay the Dec. 17 start of his planned Christmas vacation in Hawaii to ensure a deal. Congressional leaders had hoped to wrap up legislative business by the end of next week but Democrats are threatening to stay through Christmas if the issue is not resolved.

“Get it done,” Obama said Thursday. “And if not, you know, maybe we’ll have a — you know, a white Christmas here in Washington.”

By  |  03:29 PM ET, 12/08/2011

 
Read what others are saying
     

    © 2011 The Washington Post Company