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Senate rejects, for now, extending payroll tax cut

WASHINGTON — The Senate rejected competing measures to extend a payroll tax cut Thursday night, an outward display of partisanship as Republicans and Democrats moved behind the scenes to avert a $1,000 tax increase on American workers come Jan. 1.

Both bills met with GOP opposition, illustrating deep resistance within the ranks despite party leaders' efforts to coalesce around the politically volatile issue.

First, Republicans blocked President Barack Obama's proposal to expand the payroll tax break to $1,500 for 2012 and extend it to employers who hire new workers, paying for it with a 3.25 percent surtax on those earning more than $1 million a year.

Then Republicans joined Democrats in rejecting the GOP leaders' offering, which asked millionaires to pay more for Medicare, continued a freeze on federal employee salaries and cut the government workforce. It failed 78-20, with more than two dozen Republicans and all Democrats voting no.

Obama called Republican opposition "unacceptable."

"They refused to ask a few hundred thousand millionaires and billionaires to pay their fair share," Obama said in a statement. "It makes absolutely no sense to raise taxes on the middle class at a time when so many are still trying to get back on their feet."

Democrats portrayed the GOP revolt as a sign that Republicans continue to have mixed views about the payroll tax cut. One Republican, Sen. Susan Collins of Maine, joined in trying to advance the Democratic bill, which needed 60 votes to overcome a filibuster. It failed, with 51 senators willing to cut off debate and 49 opposed, including two Democrats.

Economists say letting the tax break lapse could shave 1 percentage point off gross domestic product next year, hampering the sluggish economy.

House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., met Thursday as talks were under way to devise a package that could win bipartisan support.

Boehner was expected to discuss options with his rank-and-file today, possibly pushing legislation to a House vote next week.

Senate rejects, for now, extending payroll tax cut 12/01/11 [Last modified: Thursday, December 1, 2011 11:31pm]

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