Dueling Senate Payroll Tax Plans Could Get Late-Night Vote

Dec 1, 2011 11:37am

Dueling plans for the extension of the payroll tax cut in the Senate — and dueling speeches today about why each is unfairly hurting the middle class — appear to be setting the stage for a late-night vote.

Today, Senate Majority Leader Harry Reid, D-Nev., called the Senate Republicans’ proposal released yesterday “unacceptable” and said it doesn’t stand a chance of passing the Senate.

“I was disappointed to see Republicans’ proposal was actually a back-door route to protect the very rich while shortchanging the middle class,” Reid said on the Senate floor this morning. “As usual, the only real target of the Republican meat ax is the American middle class.”

Democrats argue that the Republican plan will not provide additional tax cuts for working families, unlike their own plan which expands the current payroll tax cut while also extending it for next year.

But Republicans today argued that their proposal, as introduced last night by Sen. Dean Heller, R-Nev., would help the middle class more by not taking money away from job creators like small businesses ,who would be burdened by the tax on millionaires that is included in the Democratic proposal.

“There is no reason folks should suffer even more than they already are from the president’s failure to turn this jobs crisis around, but there is also no reason we should pay for that relief by raising taxes on the very employers we’re counting on to help jolt this economy back to life,” Senate Minority Leader Mitch McConnell, R-Ky., said on the Senate floor this morning. “We wouldn’t be helping anybody by making it less likely that small businesses actually start hiring people again. So Senator Heller’s proposal would achieve the same result, the same relief without a gratuitous hit on job creators.”

The Republicans’ plan, as scored by the nonpartisan Congressional Budget Office today, would reduce the deficit by $111 billion without raising taxes on anyone. The plan outlines a three-year freeze on federal civilian salaries and cuts 10 percent of the federal workforce long-term — points, they underscore, that came out of the Simpson-Bowles plan for deficit reduction. The proposal calls for a means test to Medicare, unemployment compensation and food stamps.

McConnell underscored today that the 10 percent reduction in the federal work force would happen gradually, not by firing anyone but by only hiring one replacement for every three federal employees who leave federal service.

The Senate Democratic plan is scheduled for a cloture vote on Friday morning. But aides say that both sides will be working for a time agreement to move the vote up. Very likely there will be a vote on both plans tonight, perhaps as late as 10 p.m., as the Senate has to move through the DOD authorization first.

UPDATE from ABC’s Ann Compton at the White House:

The White House has held its fire on the new Republican language but  in private officials doubt the numbers will add up.  Denying benefits for Medicare and food stamps to millionaires doesnt bring in much more than $9 billion.  As for a longer federal pay freeze and attrition trimming 200,000 federal workers, the White House seems to believe those cuts would have already been made under the cuts demanded because the supercommittee failed to act.

President Obama is clinging to his call for an income tax hike on net earnings over one million dollars a year, something Republicans charge would hurt million dollar businesses which might otherwise begin hiring.

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