Stimulus 2? Dems Want Payroll Tax Deduction

Aaron Flint posted on June 23, 2011 14:15 :: 1222 Views

Congressman Denny Rehberg (R-MT) has often mentioned a temporary halt to payroll taxes as a way to stimulate the economy, something that he says would have cost as much as the so-called “stimulus” bill and yet had more of an actual impact on jobs. 

Well, now it appears Senate Democrats have their own idea for using a payroll tax deduction as a second round attempt at economic stimulus.

The Hill has this

Senate Democrats on Wednesday formally backed putting stimulus measures such as a payroll tax deduction into the deficit-reduction package being negotiated by Vice President Biden and six members of Congress.

No formal proposal will be tabled in the session of the talks to be held Wednesday by Sens. Max Baucus (D-Mont.) or Daniel Inouye (D-Hawaii). The group is still reviewing various stimulus proposals and is not “wedded” to any one, Sen. Charles Schumer (D-N.Y.) told reporters.

Schumer said extending or expanding the payroll tax reduction enacted in the December 2010 tax cut deal between the White House and Congress is high on the list. Infrastructure spending and support for clean energy are other possible Democrat demands.

Nonetheless, leading Republican members of the Biden Group are walking away, citing an effort by Senate Democrats to press for higher taxes. 

Reuters (h/t Drudge Report) has this:

U.S. budget talks collapsed on Thursday after Republican negotiators walked out, throwing doubt on Washington’s ability to reach a deal that would allow the government to keep borrowing and avoid a debt default.

Representative Eric Cantor, the No. 2 Republican in the House of Representatives, said participants had identified trillions of dollars in potential spending cuts but were deadlocked over tax increases sought by Democrats. Republican Senator Jon Kyl also pulled out, according to an aide. 

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