U.S. Lawmakers Debate Payroll Tax Deduction Extension


Republicans and democrats are battling over different proposals to extend a popular tax break.

The payroll tax holiday put about $1,500 in the pockets of the average family this year, but it's set to expire at the end of the month.

Democrats want to pay for the extension with a new 3-and-a-half percent tax on millionaires.

"America's middle class has been hurting for a long time," said Senate Majority Leader Harry Reid. "They're the people who are struggling, they're the ones that need help - not these multimillionaires."

But republicans want to freeze federal salaries and cut 200,000 government jobs to cover the cost.

"This is the kind of balanced plan Americans are looking for," said Senate Minority Leader Mitch McConnel. "It's focused on helping middle-class Americans without asking them to fund benefits for the wealthiest among us."

Both of those plans are expected to fail test votes in the Senate, and that could clear the way for a compromise.

"I do believe there's enough common ground between where the White House and democrats are and where republicans are for us to move this legislation," said House Speaker John Boehner.

But not everyone agrees with the house speaker.

"I don't know what the middle class ever did to the republicans that they're so out to get them," said House Minority Leader Nancy Pelosi.

Time's running out for negotiators. They have to get a compromise plan through the House and Senate and to the President's desk before December 31.

Some lawmakers on Capitol Hill are circulating a third plan. It ties the payroll tax extension to a plan to extend unemployment benefits for people who've been looking for work 99 weeks or longer.

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