The chances of an extended pay freeze just went up even more. Politico reports today that Senate Republicans want to extend the current two-year pay freeze by one or two more years to cover the costs of a payroll tax cut.
President Obama is pushing Congress hard to renew the payroll tax cut, and Democrats want to increase taxes on the wealthy to pay for it. A bill proposed by Senate Democrats would impose a 3.25 percent tax on annual income above $1 million to cover its roughly $115 billion price tag.
But Republicans have consistently rejected any proposal that raises taxes for the rich, and the payroll tax debate is no exception. Politico said that Senate Minority Leader Mitch McConnell, R-Ken., told reporters yesterday that his conference is open to extending the payroll tax holiday, but that his party would pay for it differently.
Senate Republicans reportedly held a closed-door meeting yesterday where they coalesced around the pay freeze extension plan, along with possibly means-testing Medicare and Social Security benefits. Politico quoted an unnamed Republican senator who said that the gulf between federal and private sector pay has widened over the years — in feds’ favor — as a reason for extending the pay freeze.
The current payroll tax holiday is due to expire Dec. 31, and if it is not renewed, the average household could see taxes increase by about $1,500.
December 1st, 2011 at 4:16 am
Yep it has and I notice that Congressman make more than I do. So no freeze for those people or their staffers!? Funny with the sequestration cuts Congressional pay is not part of the deal either. Yes those hardworking people really know sacrifice and making do with less.
December 1st, 2011 at 9:07 am
The wealthy have accountants to keep from paying taxes. Increasing their tax rates just makes more work for the accountants rather than increasing the amount of money they pay to the government. Increasing taxe rates on the wealthy does not mean that the government gets more money from them.