Reid Pushes GOP To Accept Payroll Tax Cut Extension

By Adrianna McGinley

The Senate will this week vote on a bill to extend tax cuts for millions of American workers.

The Middle Class Tax Cut Act of 2011 would keep in place a payroll tax rate of 4.2 percent for employees. Employers would continue to pay a rate of 6.2 percent. The revenue generated by the payroll tax funds America’s Social Security program.

The measure is part of President Obama’s American Jobs Act, and has been introduced in the upper chamber by Sen. Bob Casey (D-Pa.). The White House and congressional Democrats estimate that if Congress fails to act by the end of the year, the average middle-class taxpayer would see his or her taxes go up by roughly $1,500 next year.

Though Republicans pushed Obama to pass the bill last year, at least one GOP’er has come out against extending it because of the fact that Social Security is currently running a deficit. Sen. Jon Kyl (R-Ariz.) said during an interview on the Fox News Channel that his party may not support the bill due to Social Security concerns, as well as the fact that Democrats have proposed paying for it by raising taxes on the wealthy.

“By taxing the people who provide the jobs, you put off the day we have economic recovery and job creation in this country,” Kyl said. “And that’s precisely what the Democratic plan would do. It would hit those people, the small businesses who we all acknowledge are the ones who create the jobs coming out of economic difficulty.”

Sen. Harry Reid (D-Nev.), however, championed the bill on the Senate floor Monday.

“The average family held onto $935 more of their hard-earned dollars this year. We need to assure those families that they can rely on that tax cut next year as well,” Reid said.

“Cutting taxes for middle-class families and business should be an area where Republicans and Democrats can find common ground,” Reid added. “This Republican opposition smacks of partisanship. Because this tax cut has President Obama’s fingerprints, Republicans won’t support it even though they know it is good policy for American families and businesses.”

Reid and other Democrats also highlighted a statement made by independent economic analyst Mark Zandi, who said that without the tax cut, “we’d be in recession right now.

“If they don’t [renew and increase the payroll tax cuts], at the very minimum, we’ll likely go into recession,” Zandi added.