Republicans in general have been divided about what to do about the payroll tax cut, with some preferring to let it expire and worrying about the long-term financing of the Social Security system. Other Republicans, including Sen. John McCain (Ariz.), are open to extending the cuts.
Republicans have voted many times in the past for tax cuts — including last year in a December deal with the president — without paying for them.
A senior Senate Democratic aide put it in more political terms, suggesting the GOP will let the payroll tax cut go through, for a price. It’s a preview of how the Democrats will frame the debate for voters.
“They better be careful not to go too far in trying to use the threat of a middle-class tax hike for leverage, or they risk further alienating voters who already think the GOP caters to the super-rich,” the aide warned.
Republicans point to 20 bills awaiting Senate action that they say would create jobs, and they are urging Democrats to compromise with them instead of trying to jam the measures through.
It’s still uncertain how the payroll tax cut — and potentially other Obama Christmas wish list items such as an extension of unemployment benefits and a measure preventing a big cut in payments to doctors — will ultimately make it to the president’s desk given the short amount of time remaining on the legislative calendar and the limited number of bills expected to move.
Possible vehicles for the tax cut include the defense bill, an appropriations omnibus or a continuing resolution that must pass by Dec. 16, and lawmakers in both parties are looking to pass a variety of tax cut extensions.
In the wake of the failure of the Joint Committee on Deficit Reduction, there may be one more attempt at a serious bipartisan deficit reduction plan.
“I think we ought to say, after Feb. 1 of next year, any 12 Senators, six of either party, who produce a plan that can reduce this deficit by at least as much as the super committee was charged to do ought to be able to bring it to the floor for a vote,” Senate Majority Whip Dick Durbin (D-Ill.) said last week on MSNBC’s “Morning Joe.”
Durbin said he told the 45 Senators backing the approach of the “gang of six”: “If the super committee doesn’t produce, now it’s our turn.”