–Senate Minority Leader Hammers Dems For ‘Cheap Political Theater’
–Sen. McConnell: GOP Wants ‘Compromise’ on Payroll Tax Extension

By John Shaw

WASHINGTON (MNI) – Senate Minority Leader Mitch McConnell said
Tuesday that Republicans want to reach a “compromise” with Democrats on
a plan to extend the payroll tax cut, but he blasted Democrats for
engaging in “cheap political theater” in proposing alternatives that are
funded by imposing taxes on the wealthy.

In comments on the Senate floor, McConnell said Democrats have
staged several “partisan show votes” on the payroll tax extension and
are engaging in “fun and games” rather that trying to create jobs.

McConnell said the plan offered Monday by Senate Majority Leader
Harry Reid was “not a compromise” but a plan that was “designed” to
fail.

He said Democrats are more intent on embarrassing Republicans on
the issue of the payroll tax extension than finding a workable
compromise.

Such a compromise, McConnell said, should not include any tax hikes
to pay for the payroll tax extension.

Last week, Senate Democrats failed to pass legislation that would
have enacted this extension and paid for it by imposing a surtax on
individual income over $1 million.

A Senate Republican plan to extend the payroll tax cut by a freeze
on federal salaries and hiring also failed last week.

The new Senate Democratic plan drops the employer payroll tax cut
and pays for the entire package with non-health care entitlement savings
and a temporary surtax on income about $1 million. A surtax of 1.9%
would be applied in 2013 and expire in a decade. The Senate Democratic
plan also secures $38 billion by increasing fees on Fannie Mae and
Freddie Mac.

Last year, the White House and Congress agreed on a tax cut package
that included reducing for one year the employee-paid share of the
Social Security tax from 6.2 percent to 4.2 percent.

Obama and most Democrats in Congress wanted to further reduce the
employee payroll tax to 3.1 percent and to cut the employer share of the
payroll tax from 6.2 percent to 3.1 percent for the first $5 million of
a company’s wage costs.

The new Senate Democratic plan drops the employer tax cut and would
cost about $180 billion.

House Republicans are preparing an alternative payroll tax
extension package that would cost about $200 billion and would be paid
for by entitlement and other savings.

The two parties are expected to spend much of the next two weeks
battling over the details of renewing the payroll tax cut and other
expiring tax provisions.

** Market News International Washington Bureau: (202) 371-2121 **

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