Another short-term payroll tax cut?

February 10, 2012

Groundhog Day was last week, but it's obviously Congress' favorite movie. Capitol Hill lawmakers just love doing the same thing over and over and over.

This time the payroll tax cut conference committee has stalled in a repeat of the battle the House and Senate fought just before Christmas.

After a game of political chicken, Congress agreed to keep the 2-percentage-point payroll-tax cut, the Medicare reimbursement fix and unemployment benefits in place through Feb. 29.

The hope was that after the holdiay break, conferees would be able to come up with mutually acceptable ways to raise the estimated $160 billion needed to keep the short-term provisons in place through all of 2012.

Things aren't working out as hoped.

Both sides are offering essentially the same proposals that failed two months ago. Democrats have resurrected a proposed surtax on millionaires. Republicans still want to freeze the pay of federal workers and limit Medicare subsidies for higher-income seniors.

And now there's talk by some in Congress that we might see another short-term extension of the measure set to expire in a couple of weeks.

It's not what either side wants, but given the possible political fallout, neither party is ruling out another temporary extension if no deal is reached.

Congressional staffers reportedly will work through the weekend to try to avoid short-term payroll tax déjà vu. Good luck with that.

Meanwhile, you can see how much time is left in the current payroll tax cut via the countdown clock in the left column of the ol' blog (just under Uncle Sam's unsmiling mug). It will keep ticking away until Congress enacts a full-year measure or gives up entirely.

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