Republicans propose not paying for payroll tax cut

Reuters News

2/13/2012 3:13:46 PM - Reuters News

WASHINGTON (Reuters) - Republican leaders in the House of Representatives, in an about face, proposed on Monday extending a payroll tax cut for 160 million workers without offsetting spending cuts.

In a statement, the Republican leaders confirmed what was first reported by Reuters that they decided to move ahead with a simple extension of the payroll tax cut, now set to expire at the end of this month.

The proposal might not sit well with conservatives who have insisted on paying for the package, but it would ensure that the tax break for workers would continue beyond February 29. It also would help remove what has been a politically damaging issue for Republicans in an election year.

Negotiations with Democrats would continue on averting a pay cut for doctors treating Medicare patients and on an extension of jobless benefits for the long-term unemployed, while also seeking a way to pay for the package, the statement said. It was issued by House Speaker John Boehner and other House Republican leaders.

Republican leaders blamed Senate Democrats for failing to agree on spending cuts to cover the roughly $170 billion price tag.

"Democrats' refusal to agree to any spending cuts in the conference committee has made it necessary for us to prepare this fallback option to protect small business job creators and ensure taxes don't go up on middle class workers." House Republican leaders said in their joint statement.

Democrats will likely go along with the proposal since they have not demanded offsets for the entire package. A senior Democratic aide described as a major concession by Republicans.

(Reporting By Donna Smith and Richard Cowan)