Third Time's a Charm?December 5, 2011 - by Donny Shaw
Senate Democrats have released details of their third attempt to get Republicans on board for two major pieces of the Obama jobs bill — extending the payroll tax holiday and extended unemployment insurance for another year, . According to a press release from Sen. Robert Casey [D, PA], the new proposal would reduce the overall cost of the plan by about $80 billion by letting payroll tax holiday expire for employers’ contributions. Workers would still get a 50 percent reduction in the amount of payroll taxes they would have to pay normally.
To pay for the bill, the proposal would establish a 1.9 percent surtax on income earned $1 million that would expire after 10 years. It would also call for an increase in fees that mortgage lenders pay to Fannie Mae and Freddie Mac to guarantee new mortgages, something that both Democrats and Republicans on the supercommittee agreed to. To further sweeten the deal for Republicans, a provision from Minority Leader Sen. Mitch McConnell [R, KY] to ensure that millionaires can not receive unemployment insurance or food stamps is also included.
The surtax on income over $1 million is smaller than what was in the two previous plans ( 3.1 percent), but it is still expected to be rejected by the vast majority of Republicans. It’s become pretty clear that the Republicans have drawn a line in the sand against any tax increases on wealthy Americans, and they’ve already shown that they’re going to stick to that position even if it means letting payroll taxes increase for all Americans by an average of $1000/year per worker and threatening the economic recovery by reducing demand for goods and services.
A vote on overcoming Republican opposition to even considering the proposal is expected this week.