Payroll tax 'game' could cost workers

December 22, 2011 6:55:54 AM PST
The U.S. House of Representatives Tuesday rejected legislation passed by the Senate to extend the payroll tax cut and jobless benefits for two months.

As Washington Democrats and Republicans agree that a payroll tax cut, and special unemployment and Medicare benefits should be extended, they find ways to disagree. But, should this disagreement continues past New Year's Eve, virtually every American worker will take a huge hit in the pocketbook.

"A hundred and sixty million workers across America, 12 days from now, will see their payroll tax go up," said Senator Dick Durbin, (D) Illinois.

Durbin repeated the dire prediction made by Democrats around the country: the House refusal to extend the payroll tax cut means American paychecks will shrink by 2 percent on January 1.

"The average family in Illinois makes about $50,000 a year," said Durbin."Two percent comes to about a thousand or $1,200 a year."

Before it recessed last Saturday, Durbin's U.S. Senate gave overwhelming bipartisan approval to a bill extending the tax cut, as well as supplemental Medicare payments to doctors, and unemployment benefits until February 28.

"Without the unemployment benefits, I don't know where I would be," said John Falzone, who is unemployed.

Senate leaders from both parties promised a full one-year extension would be negotiated after New Year's Day.

But, House Republicans led by speaker John Boehner refused to vote on the temporary extension, insisting the Senate return to Washington to negotiate the one-year bill immediately.

"When we get to February 28th, guess where we'll be? We'll be right here doing the same thing that we're doing right now," said Representative John Boehner, (R) Ohio.

"There's no reason we can't work out a deal to give them certainty for the next year," said Representative Aaron Shock, (R) Illinois.

"We have more important things to worry about than politics right now," said President Barack Obama.

President Obama accused Republicans of holding the bill hostage in an election year political game.

"It's not a game for the average family, which doesn't have an extra thousand bucks to lose," said President Obama. "It's not a game for somebody who is out there looking for work right now."

"The House of Representatives is back in session," Shock said. "We ask that the Senate return back to Washington, D.C., to iron this out."

Senator Durbin theorized why he thinks Republicans don't want a payroll tax cut in 2012.

"I think the real reason is this economy is starting to slowly improve and some of them, cynically, do not want that to happen on President Obama's watch," Durbin said.

Congressman Shock called that charge "outrageous." As of late Tuesday afternoon, Senate Democratic leaders said they would not return to Washington to confer with the House on a one-year bill. So, right now, House members remain in Washington, waiting for senators to return.

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