Feb. 6, 2016 SIGN IN | REGISTER

GOP Offers Payroll Tax Cut

Tom Williams/CQ Roll Call
Sen. Susan Collins broke with the majority of the Republican Party this week and plans to offer her own proposal to tax wealthy Americans to pay for the popular payroll tax cut extension.

Senate Republicans countered a Democratic plan to tax millionaires and billionaires Wednesday with a proposal that implicitly acknowledged the strength of the Democrats’ message but fell short of its substantive goal.

In a $111 billion framework aimed at extending President Barack Obama’s payroll tax cut, the GOP’s proposal mentioned the word “millionaires” five times, noted “billionaires” twice and misspelled the name of one of the world’s richest men — investor Warren Buffett — three times. But the plan to pay for a one-year extension of the payroll tax cut finds most of its savings from placing a three-year pay freeze on federal workers and cutting the government workforce by 10 percent, or by about 200,000 jobs. Both federal worker provisions were proposed in the bipartisan deficit reduction recommendations made by Obama’s debt panel last winter.

The GOP plan purports to go after the wealthy by recommending means testing of Medicare benefits, food stamps and unemployment insurance “so that millionaires aren’t receiving federal benefits that are better targeted elsewhere.”

Moreover, the Republican proposal would only extend existing law, while Democrats are seeking to expand the payroll tax holiday to further reduce employees’ payments and to introduce a new break for employers — at a cost of $265 billion.

The dueling plans set the table for the first of several Congressional showdowns that will have to play out before Christmas — a timeline both parties concede creates political complications, particularly when the issues are tax breaks and unemployment benefits. Senate Majority Leader Harry Reid (D-Nev.) has filed cloture on the Democratic version of the proposal, which would be offset by a surtax on those making more than $1 million a year, and a test vote is expected today. On Tuesday, Senate Minority Leader Mitch McConnell (R-Ky.) insisted that Republicans wanted to extend the tax cut but would find a better way to pay for it than by taxing “job creators.”

Democrats this fall have repeatedly lost votes to tax millionaires.

Still, the GOP plan appeared to be an indication that Republicans are smarting from a Democratic messaging campaign — headlined by the president — that has argued the rich are not paying their fair share into government coffers. Various public polls in recent months have shown a majority of Americans agree, and the president hammered home that theme again Wednesday during an appearance in Scranton, Pa.

“We need to ask wealthy Americans to pay their fair share,” Obama said. “Let’s ask them to help out a little bit because they made it through the recession better than most of us.”

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