House Republicans Agree to Extend 2 Month Payroll Taxcut

House Speaker John Boehner
House Speaker John Boehner

Republican House Speaker John Boehner along with Republican House leaders agreed to approve President Obama’s push for an extension of the payroll tax cut on Thursday. Following an agreement that was already reached between both parties in the Senate last Saturday, the Republican controlled House ended their final resistance and are now set to approve the two month payroll tax cut extension in addition to an extension of unemployment benefits.

The tax cut legislation is expected to be placed before the House and Senate on Friday. The House plans to hold a voice vote, requiring only a few members to be present before it is passed. The Senate will later appoint new members of a House-Senate conference committee to work out legislation to extend the payroll tax cuts during the rest of 2012 beyond the short 2 month extension.

Earlier in the week, House Republicans refused to accept President Obama’s proposal to extend the payroll tax cut. One of the key issues that Republicans raised was the funding of the payroll tax cut. At the final hour, the funding debate moved to the sidelines and Republican House Speaker John Boehner reluctantly supported the payroll tax cut.

A refusal to meet the January 1st payroll tax cut deadline would have led to 160 million Americans being faced with a tax hike. Two million Americans without jobs for 6 months would lose their unemployment benefits. Medicare would have also been impacted. Doctors would have faced a 27% cut in their medicare benefits.

Sensing that the majority of working Americans supported his payroll tax cut extension, President Obama strongly advocated for its passage all week long as he took his message to the streets, describing his tax cut deal as a way to stand up for the working middle class in America, a segment of the population that he needs to gain support from if he wants to become re-elected next November.

President Obama also criticized Republican efforts t0 block the tax cut and went head to head with Republican House Speaker Boehner to show that he was not willing to back down.

Many prominent Republicans and conservative leaders signaled a strong message to House Republicans that a two month extension of the payroll tax cut was the best way to help working Americans. Senator Mitch McConnell (R) of Kentucky urged his support for the 2 month payroll tax cut.

Arizona Senator John McCain (R) said Congress’ failure to reach an agreement to extend the payroll tax cut for working Americans “hurts the Republican party.” Senator Scott Brown (R) from Massachusetts also expressed disapproval over House Republican efforts to stifle the payroll tax cut.

“The House Republican plan to scuttle the deal to help middle class families is irresponsible and wrong” Brown said.

Conservative Karl Rove and conservative leaning Wall St. Journal also expressed support for the passage of the payroll tax cut.

Increasingly, House Republicans found themselves fighting an uphill battle by opposing the tax cut with the added possibility of a future backlash at the voting polls next November.

The acceptance of the 2 month extension of the tax cut now means that employees share of social security payroll tax will remain at 4.2% of wages through February 29th. If the tax cut had not been approved it would have increased up to 6.2%.

The payroll tax cut over a 12 month period amounts to an average of $1,000 a year for working Americans.

At a time when the American economy is still in a period of recovery, a $ 1,000 tax cut return for many Americans will lend a hand towards ensuring that spending and economic growth are still moving forward.

President Obama voiced his approval for the decision made by House Republicans to extend the payroll tax cut.

“This is the right thing to do to strengthen our families, grow our economy, and create jobs” he emphasized. “This is real money that will make a difference in people’s lives” Obama said.




About Johnathan Schweitzer 1615 Articles
Welcome to Schweitz Finance. I hope that my financial website will provide you with relevant market information to help you manage your investments with greater clarity and insight.
Contact: Website