Tick Tock Tick Tock: The Clock Is Ticking On the Payroll Tax
How serious is the Obama administration about making sure the payroll tax cut is reauthorized? They’re calling it “doomsday” now, and they’re watching the clock anxiously, according to The Hill. “White House press secretary Jay Carney was flanked by something new at a Monday press briefing: a ‘doomsday clock’ counting down to when the employee payroll tax cut expires….Carney said the clock emphasizes the urgency for legislators to extend the tax cut. ‘I think what this clock dramatizes that there isn’t a lot of time and that Congress needs to act and do the right thing,’ Carney said.”
The administration may be feeling the urgency, but what about Congress? Once more, leaders from both party are radically opposed to how to pay for the extension, with Democrats still looking to have at least some of the cost covered by a small increase in taxes on those who earn more than $1 million per year. Republicans, meanwhile, have decided to push for the extension to be paid for solely by cuts in Medicare and more pay cuts for federal workers.
Still, a bipartisan approach isn’t totally out of the question. Democratic Senator Claire McGaskill and Republican Senator Olympia Snowe today unveiled a proposal that would extend and expand the payroll cut, and would even be paid for with the “millionaire surtax.” And to overcome the GOP objections that the surtax would hurt “small businesses” that file as individuals, they’ve allowed a business exception from the hike to make it apply just to people.
However, President Barack Obama questions the Republican need to have the payroll tax offset by budget cuts in the first place, considering they didn’t care about that at all when it came to extending the Bush tax cuts for the rich last year. “Over the last decade, they didn’t feel the need to pay for massive tax cuts for the wealthiest Americans … Indeed, when the Republicans took over the House at the beginning of this year, they explicitly changed the rules to say that tax cuts don’t have to be paid for. So forgive me a little bit of confusion when I hear folks insisting on tax cuts being paid for.”
He then accused the party of only being for tax cuts if they are for the rich. “I know many Republicans have sworn an oath to never raise taxes as long as they live. How could it be that the only time there’s a catch is when it comes to raising taxes on middle class families? How can you fight tooth and nail to protect high-end tax breaks for the wealthiest Americans and yet barely lift a finger to prevent taxes going up for 160 million Americans who really need the help?”
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