‘Majority’ of Republicans likely to back payroll tax cut extension, McConnell says


(Jacquelyn Martin/Associated Press)

Senate Minority Leader Mitch McConnell (R-Ky.) predicted Tuesday that most Senate Republicans will back legislation that would extend the one-year payroll tax cut for employees, although GOP lawmakers differ with Democrats on how to pay for the measure.

“I think at the end of the day there’s a lot of sentiment in our conference, clearly a majority sentiment, for continuing the payroll tax relief that we enacted a year ago in these tough times,” McConnell told reporters at a Capitol news conference after Senate Republicans’ weekly luncheon. “But we believe with this kind of deficit, we ought to pay for it.”

Senate Democrats plan to force a vote Friday on a measure that would pay for the $265 billion tax cut – enacted by Congress during last year’s lame-duck session – through a surtax on individuals earning more than $1 million a year.

Republicans oppose such a move, arguing that it would adversely affect the economy. McConnell on Tuesday criticized Democrats’ proposed pay-for as “a permanent tax increase on very, very large number of small businesses.” Previous attempts by Democrats to couple a so-called “millionaire surtax” with parts of President Obama’s jobs bill have been blocked by Senate Republicans in recent weeks.

McConnell said that Senate Republicans will introduce their own proposal for paying for the payroll tax cut extension, although he declined to offer any details Tuesday on what that alternative might look like.

The White House has said that the millionaire surtax is Obama’s preferred way of paying for extending the tax cut, and on Tuesday countered McConnell’s statement that the surtax would negatively impact small businesses.

“The tax on incomes above $1 million a year, I think, would hit very few small businesses,” Council of Economic Advisers Chairman Alan Krueger said at the daily White House briefing. “The vast majority — one figure I saw was 99 percent — of individuals with small business income would not be affected by this. So the vast majority of employers would be unaffected by what was proposed to pay for the payroll tax extension.”

White House Press Secretary Jay Carney declined to say whether the White House would back legislation that would pay for the payroll tax cut extension through other means.

“We don’t know what the end-game is yet,” he said.

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