A stalemate over extending the so-called middle class payroll tax break dragged on Thursday as the Senate rejected dueling proposals from both parties. Democrats want to pay for the tax cut with a surtax on income exceeding $1 million per year.
“The choice today was clear, and Republicans made the wrong one,” said U.S. Sen. Patty Murray, D-Wash. “Instead of standing with Democrats and middle class families to extend and expand a critical tax cut, Republicans chose to stand with millionaires and billionaires and protect them from paying a penny more toward their fair share.”
Meanwhile, House Republicans promised to put forth their own bill to extend the payroll tax cut and unemployment benefits next week. House Speaker John Boehner, R-Ohio, said during a press conference that the bill would include a controversial provision to allow construction of an oil pipeline from Canada to Texas. President Barack Obama immediately threatened to veto the bill if it contained the pipeline construction, according to ABC News.
Without congressional action by Dec. 31, the Social Security payroll tax will climb from 4.2 percent this year to 6.2 percent next year. Under that scenario, about 160 million middle-income American families, including 3.5 million in Washington, would see their take-home earnings decline by about $1,000 per year, Murray has said. Clark County residents earning the median income of $56,351 per year would lose $1,127 in take-home earnings next year, according to an estimate by Murray’s office.
That would take a toll on an already weak economy, Murray said.
The Democratic senator has been at the forefront of the impasse over the tax cuts. On Wednesday, she took the Senate floor to implore Senate Republicans to approve a Democratic compromise.
She outlined compromises Democrats had made to the measure to make it more acceptable to Republicans. That included modifying the amount of the cut and scaling back a GOP-opposed surtax on millionaires to defray the costs of extending the tax holiday, she
said. The most recent proposal reduced the surtax from 3.25 percent to 1.9 percent.
“I continue hoping that our Republicans colleagues will be as focused on tax cuts for the middle class as they are on the wealthiest Americans and largest corporations, and I hope they stand with us to pass this critical legislation in time for the holidays because that’s what American families want,” Murray said.
Democratic Senate Majority Leader Harry Reid of Nevada has pledged not to adjourn the chamber for the holidays until lawmakers reach an agreement.
All of Clark County’s congressional delegates have expressed support for extending the payroll tax cuts. In addition to Murray, U.S, Sen. Maria Cantwell, D-Wash., also voted to extend the tax relief.
Republicans have been divided over the matter.
U.S. Rep. Jaime Herrera Beutler of Camas, for instance, has said she favors extending the payroll tax cut. Her spokesperson, Casey Bowman, said Herrera Beutler would consider any variations of the House proposal. Bowman declined to answer whether the freshman congresswoman would vote for a measure that included a surtax on millionaires to pay for the middle class tax cut. Bowman said she supports closing some corporate tax loopholes as a means to pay for the cut. That could include ending ethanol subsidies to the tune of $6 billion per year and Brazilian cotton subsidies, Bowman said.
Herrera Beutler was quoted in the Los Angeles Times Sunday as saying she didn’t want to raise taxes on middle class families.
“This is important,” she told that paper. “It hits moms and dads and working families. Let’s stop subsidizing corporations to exist. That’s not free market to me.”
The House Republicans’ measure also would include a 3.1 percent payroll tax but no surtax on millionaires, Boehner said. He said the pipeline project fits in with the payroll tax cut’s theme of helping the economy because the pipeline would generate tens of thousands of jobs.
Amber Moon, Western regional press secretary for the Democratic Congressional Campaign Committee, said Republicans’ decision to bring the pipeline project into the payroll tax cut debate appeared to be a stalling tactic.