A quick update on the payroll tax cut
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As the drama of the payroll tax cut debate continues to unfold, we’re going to try to quickly catch everybody up.
What happened: Over the weekend the Senate passed a two-month extension of the payroll tax cut, unemployment insurance, and the “doc fix.” Upon passage, the measure was sent to the House.
Subsequent reaction: House Republicans were quick to line up against the plan. While in favor of an extension, Republican leaders and rank and file members want to see the benefits extended for an entire year. Similarly the President has also made it clear that the Administration wants to see the popular policy extended through the end of next year.
What’s next: The House is expected to vote on the extension later today. All the news from the chamber indicates that the measure will fail. To force the House’s hand, Senate Majority Leader Harry Reid has warned that the Senate will not reconvene to reconsider the issue should the House reject an extension.
What it means: If the payroll tax cut isn’t renewed by the end of the year, Americans will see their Social Security taxes rise from 4.2% to 6.2% at the beginning of 2012. Other important economic provisions are also wrapped up in the discussions including unemployment benefits and Medicare payments to doctors.