Even on Valentine’s Day, there’s no love in Congress as House and Senate Conferees try to reach agreement to extend the Social Security payroll tax cut for the remainder of the year. The temporary payroll tax cut is due to expire on February 28, 2012.
Yesterday, noting that since no progress was being made in reaching an agreement with Senate lawmakers over the extension of the soon-to-expire payroll tax cut, House Speaker John Boehner, R-Ohio, announced plans to introduce legislation that would extend the payroll tax holiday for the remainder of 2012 while the conference negotiations continue regarding how to pay for it. Republican and Democratic lawmakers cannot reach agreement on how to offset the roughly $160-billion cost of the extension. The legislation, however, would not extend unemployment benefits and the Medicare physician payment rate (the "doc fix"). These items would presumably need to be resolved separately.
Democrats originally wanted to extend the payroll tax holiday without offsetting its cost, arguing that it should be treated just as Congress treats other emergency spending bills. Democrats are also objecting to not including unemployment benefits and the doc fix in any extension legislation.
Maybe instead of passing the payroll tax cut extension, Congress should vote to extend the R&D tax credit so some enterprising young entrepreneur can invent the money tree!
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