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GOP Tries Undercutting Democrats on Payroll Tax

Senate Republicans today announced they would introduce a counterproposal to extend a payroll tax cut set to expire at year’s end, rebutting Democratic attacks that the GOP is prepared to let middle-class taxes rise as a way to damage President Barack Obama’s re-election prospects.

Minority Leader Mitch McConnell (Ky.) said Republicans will have a proposal with an alternative offset to a Senate Democratic bill that would fund an expansion of the payroll tax cut with a surtax on individuals and families earning more than $1 million a year. McConnell also indicated that he expects the GOP-run House and Democratic-controlled Senate to compromise on an extension of unemployment insurance extension benefits before they expire, also at year’s end.

“In all likelihood we will agree to continue the current payroll tax relief for another year, but we believe it should be paid for. Senate Republicans will offer an alternative that would pay for it,” McConnell told reporters during an afternoon news conference. “We’ll offer an alternative to the one that’s being proposed in the Senate, which, as I indicated, would have a permanent tax increase on a very, very large number of small businesses in order to pay for temporary tax relief.”

McConnell declined to reveal what the Republican alternative funding measures might look like, but he said a majority of his Conference favors extending the payroll tax cut.

Senate Majority Leader Harry Reid, speaking to reporters just before McConnell, kept up his attacks on the Republicans, charging that they are out of step with most voters and citing polls that have shown support for raising taxes on high earners.

The Republicans, the Nevada Democrat said, “are not in favor of extending the payroll tax, the holiday we’ve had that works so well.”

“Republicans know that raising taxes on the middle class is the wrong thing to do. That’s why, in the past, they’ve always supported it,” Reid continued. “So, the reason for the Republicans’ change of heart, obviously, is simple. As Sen. McConnell has said, his most important goal is to defeat President Obama. It’s clear the Republicans will stop at nothing to achieve that goal, even if it means hitting the middle class with a $1,000 tax increase.”

Besides multiple votes planned on the payroll tax, Reid said the Senate must clear a number of legislative items from its agenda before adjourning for the holidays. They include a vote on two balanced budget amendments, one a Republican proposal and one offered by Sen. Mark Udall (D-Colo.). Reid added that several nominations would receive votes, as would a measure to extend the rates paid to Medicare providers, commonly referred to as the “doc fix.”

Reid added that a package of tax extenders and the unemployment extension require consideration.

Congress also must act to keep the government funded through next year. The current stopgap spending bill expires in three weeks.

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