Senate Rejects Extending Payroll Tax Cut -- For Now

[WestVirginiaRebel]

Fox News:

WASHINGTON – Senate Republicans on Thursday defeated a plan by President Barack Obama to renew a temporary cut in the Social Security payroll tax, even as all sides on Capitol Hill continue to promise an eventual compromise on a tax holiday before Congress leaves Washington for Christmas.

More than two dozen of the Senate's 47 Republicans also voted to kill an alternative plan backed by GOP leader Mitch McConnell of Kentucky in a vote that exposed a wide split among the party over whether renewing an existing 2 percentage point payroll tax cut makes sense.

The defeat of the competing plans came as House Speaker John Boehner, R-Ohio, said for the first time that renewing the payroll tax cut would boost the lagging economy, a view many in his party don't share. Boehner also promised compromise on a renewal of long-term jobless benefits through the end of 2012.

The payroll tax cuts and unemployment benefits are at the center of a costly, politically-charged year-end agenda in which Democrats seem poised to prevail in renewing a tax cut that many Republicans back only reluctantly. But Republicans are insisting -- in a switch from last year -- that the payroll tax cut and jobless benefits be paid for by cutting spending.

Both parties are seeking the political high ground as next year's elections loom, with Democrats accusing Republicans of siding with the rich, and Republicans countering that Democrats were taxing small business owners who create jobs.

The first payroll tax plan to fall was a Democratic measure that was the centerpiece of Obama's jobs package announced in September. It would cut the Social Security payroll tax from 6.2 percent to 3.1 percent next year and also extend the cut to employers, with its hefty $265 billion cost paid for by slapping a 3.25 percent surtax on income exceeding $1 million.

Republicans and a handful of Democrats combined to kill the measure on a 51-49 tally that fell well short of the 60 required under Senate rules. For the first time, a Republican, Susan Collins of Maine, voted to support the millionaires' surcharge.

The White House issued a statement by Obama that accused Republicans of voting to raise taxes on 160 million people because they "refused to ask a few hundred thousand millionaires and billionaires to pay their fair share." The statement didn't mention the GOP alternative.
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That's because the GOP alternative actually would have cut taxes...