WASHINGTON — Hesitant to be seen as holding up a payroll-tax break for American workers, House GOP leaders will put forward a new proposal to extend the tax cut — giving up, for now, on the GOP-led requirement that it must be paid for, as talks on a compromise with Democrats have stalled.
House Speaker John Boehner, R-Ohio, and other leaders said their backup plan could come for a vote as soon as this week, as Congress struggles to find common ground before the tax break expires Feb. 29. Keeping the tax holiday is President Barack Obama’s top legislative priority.
“This is not our first choice,” said Boehner and his leadership team, including Majority Leader Eric Cantor, R-Va., in a joint statement. “But in the face of the Democrats’ stonewalling and obstructionism, we are prepared to act to protect small businesses and our economy from the consequences of Washington Democrats’ political games.”
Republicans are seeking to shift the debate on the tax break for 160 million working Americans. Last year’s showdown left them badly battered in the polls as they insisted the tax break be paid for with cuts elsewhere in the budget — and some Republicans said the tax cut was not a worthwhile benefit.
The new GOP proposal would allow the tax break to continue without having yet resolved the tough decisions over how to pay for the $160 billion package — a decision that could rile fiscal conservatives within Boehner’s right flank who insist on keeping deficits low. Negotiations under the GOP proposal would continue.
Democrats welcomed the overture as a “major breakthrough.”
“Send it on over,” said a Democratic aide familiar with the talks.
The benefit trims by 2 percentage points the tax workers pay into Social Security, providing about $20 a week in the pockets of average workers that economists say is helping to stimulate the economy. The retirement fund would be replenished by the cuts to other programs.
Workers have enjoyed the tax break since January 2011, and Congress agreed late last year to extend it through February. But negotiators have run into the same roadblocks in recent weeks as they struggle to find agreement on how to pay for the tax break for the rest of 2012.
