House GOP chairman: Payroll tax cut will be extended

House Republican leaders are pressing their rank-and-file to get behind an extension of the tax break, saying that the GOP should not play a part in letting taxes rise.

{mosads}“The impact is in January, and our leadership is committed to extending the tax cut, not raising taxes, therefore, but finding the offsets,” Upton said in his Bloomberg interview.

Republican leaders presented lawmakers with a slew of items that could possibly be used to extend the current cut, which slices the payroll tax rate from 6.2 percent to 4.2 percent.

But some House Republicans said after the meeting that they were struggling to balance the desire to keep money in Americans’ pockets with the long-term health of Social Security. The payroll tax funds the entitlement program, and general Treasury funds would be used to make up for any revenues diverted from Social Security by the tax cut.

Some in the GOP ranks have also expressed some skepticism that the current payroll tax cut has generated much economic growth.

On Thursday, the majority of Republican senators voted against a GOP proposal to extend the tax cut for another year, which would have primarily been offset with savings wrung from the federal workforce.

The Senate Democratic plan for a deeper payroll tax cut – down to 3.1 percent – that would have also been extended to employers also failed to clear a procedural hurdle on Thursday. The Democratic proposal would have been paid for with a surtax on millionaires.

In recent days, Democrats have cited economic analysts who have said that not extending payroll tax relief would be a major hit to the economy, and have said they have seized the political advantage in the tax debate.