Top Lawmakers 'Concerned' Over Payroll Tax Progress

(NewsCore) - US Senate Majority Leader Harry Reid (D-Nev.) on Tuesday said lawmakers working on an extension of a popular payroll tax cut had only until early next week to reach a deal, as the two sides negotiating the package showed few signs of compromise and spent a morning meeting digging in to their positions.

House Ways and Means Committee Chairman Dave Camp (R-Mich.) said that if negotiators cannot agree on current proposals to offset the cost of the package, they may have to "begin looking at scaling back some of these core policies" or else rely on deficit spending or simply kick the issue "outside the scope of the conference."

His comments came during a conference committee meeting that was not propitious. House Republicans started the latest round of talks with a proposal to cover the cost partly with a freeze to cost-of-living pay increases for federal workers. That outraged Maryland Democrats, whose constituents include many government workers.

Democrats were no happier with a proposal to gradually force more senior citizens to pay higher premiums for Medicare. At some points, the talks became so contentious that lawmakers would not take turns speaking.

Democrats used the meeting to talk again about using a surtax on people making more than $1 million a year to cover the cost. Sen. Bob Casey (D-Pa.) offered a one percent surcharge, lower than the 1.9 percent he had previously pushed. Republicans shot that down and pointed out that President Barack Obama has already gone along with one of their ideas: to have more seniors pay higher Medicare premiums.

But Rep. Chris Van Hollen (D-Md.) noted that offer was "contingent on making other changes like closing tax loopholes" so that senior citizens would not bear all the burden.

The Democrats and Republicans were talking about three ideas that already passed the US House of Representatives last year, when lawmakers were working on a full-year extension of the payroll-tax cut, extended jobless benefits and a measure to prevent a cut in pay to doctors who serve Medicare patients. The Senate rejected that deal, taking an alternative approach that resulted in the two-month extension that expires at the end of February.

Sen. Dick Durbin (D-Ill.), the No. 2 Senate Democrat, said he hoped an inability by lawmakers to strike a long-term deal would not result in a series of short-term extensions of the tax credit and unemployment assistance.

But Senate Republican leaders said they were increasingly getting the impression that Democrats were not negotiating in good faith.

The lawmakers on the 20-person panel have just over three weeks before a short-term deal reached late last year expires. If Congress fails to act, workers will see their take-home pay shrink as the 4.2 percent tax used to fund Social Security reverts to 6.2 percent. Workers who have been unemployed for an extended basis would lose or face less generous federal benefits that shore up the jobless when unemployment drags on.

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