On Thursday, the U.S. Senate turned back both Democratic and Republican efforts to renew the “payroll tax holiday.” The tax break allowed approximately 160 million Americans to receive a $1,000 tax bonus this year because Congress temporarily slashed the payroll tax workers pay on their wages. That tax revenue funds Social Security.
The payroll would revert to its old level if Congress doesn’t act by December 31. Appearing on MSNBC Monday morning, 6th District Congressman Jim Clyburn said there is no way in the world they will let this increase be placed on working people.
“The payroll tax holiday as proposed by the president I think is a good way to go. It looks as if the Senate is not going to approve a surcharge on individual income over a million dollars. I think what we ought to do is take a look at what the CBO (Congressional Budget Office) has done with the overseas contingency account. I don’t know why we won’t use that to pay for not only the payroll tax extension, but for unemployment insurance as well.”
Budget experts say the government will save about $1 trillion over the next 10 years because the wars in Iraq and Afghanistan are drawing to a close
Clyburn says he is waiting to see the compromise plan that Senate Majority Leader Harry Reid (D-Nevada) will propose because any compromise plan to fund the continuation of the “payroll tax holiday” must come from the Senate due to the refusal by House Republicans to get involved in compromise negotiations.
The House plan would require paying for the lost tax revenues by freezing federal employees pay and increase Medicare premiums for wealthy beneficiaries.
“We’re not going to get this stated on the House side because Speaker Boehner knows full well what needs to be done, but I don’t think he’s going to get the kind of support he needs to do anything from his conference,” Clyburn said.
President Obama is urging Congress to extend the payroll tax cut, saying that letting it expire would be a “significant blow” to the economy. In his most recent weekly radio and Internet address, the president said the tax cut saves the typical middle class family about $1,000 per year.