GOP lawmakers say no to a payroll tax cut extension
June 15th, 2011
06:03 PM ET
12 years ago

GOP lawmakers say no to a payroll tax cut extension

(CNN) - Two top Republican lawmakers said Wednesday they don't support extending a payroll tax cut as a way to stimulate the economy -an idea the White House is weighing– because they don't believe it helped create jobs and that money is needed to shore up Social Security and Medicare.

Sen. Lamar Alexander, R-Tennessee, and Rep. Jeb Hensarling, R-Texas, who both hold GOP leadership positions, told reporters that the current high unemployment rate is proof that short-term stimulus programs, like the payroll tax reduction, don't work.

"I don't sense how this move will install the confidence that small businesses in east Texas and Fortune 50 companies are going to need to take care of the Obama employment gap," Hensarling said.

"We don't need short term gestures, we need long term strategies that build into our system simpler taxes, lower taxes, fewer mandates, lower costs, lower energy costs, more certainty," Alexander said.

The White House said Tuesday it might ask Congress to extend the expiring reduction in an effort to stimulate job growth.

Also Wednesday, negotiations led by Vice President Biden to raise the country's debt ceiling ended with lawmakers saying they were making good progress but were still at least two to three weeks away from an agreement.

"I think our hope would be to wrap up these meetings by the end of the month but again I don't think we have a hard deadline, that's a goal," said Rep. Chris Van Hollen, D-Maryland, who is taking part in the talks. Van Hollen declined to discuss the specifics of the discussions and refused to say if extending the payroll tax cut came up in their meeting.

Sen. John Kyl of Arizona, one of the Republicans in the talks, was equally mum about what the negotiators discussed. He said the end of the month deadline is "an aspirational date, a goal, a target."

"But there's just a huge amount of work," he said.

Meantime, Democratic senators held a press conference to highlight a vote Tuesday in which more than 33 Republicans voted in favor of eliminating tax breaks for the ethanol industry.

Sen. Chuck Schumer, D-New York, called it a "watershed moment" because Republicans are usually wary of voting to raise any taxes.

"It means tax expenditures are now fair game in the ongoing deficit reduction talks," he said. "These Republicans broke with right wing interest groups that have sought to protect all forms of taxpayers subsidies no matter if they are necessary or not."

Alexander, who voted to end the ethanol subsidy, said his staff is scouring the tax code for wasteful tax expenditures, especially in the energy sector.

"I think getting rid of unwarranted tax breaks is a good idea," Alexander said. "We have $1.2 trillion in tax expenditures and some of them aren't justified and they're adding to the debt."

However, Hensarling said House Republicans would only support changes – such as eliminating the ethanol credit - as part of a broad tax reform effort.

"We believe the tax code needs to be made fairer, simpler, flatter and that would include cleaning out tax breaks like ethanol," the conservative lawmaker said. "We do not believe particularly at this time in our nation's economic history that we need to have tax increases."

Filed under: Congress • Jeb Hensarling • Lamar Alexander • Taxes
soundoff (41 Responses)
  1. Louisiana Man

    Why do we let the GOP hold the Dems hostage on the subject of tax cuts? Show some spine and tell the GOP "tax cuts to be eliminated for all'.
    Its a fact what the affluent do with their discretionary cash flow–they invest it alright. But for their own personal gain. -furthering fattening their coffers-then end up paying a paltry 15% on dividends on aforementioned investment-
    All thanks to loopholes by lobbyist and their buddies in congress.

    The other 99% however-SPEND any funds over and above the necessities of life.
    We spend-they hoard and invest and they get the benefits without sacrifice-
    We get the shaft and they get the uranium mine.

    June 15, 2011 07:53 pm at 7:53 pm |
  2. Former Republican, now an Independent

    Lamar Alexander knows absolutely nothing about working class people or what is good for them. He is a rich kid, born with a silver spoon in his mouth and has never held a real "working" job in his life. Being a native Tennessean, I can attest that he was a dishonest governor and now a lousy excuse for a senator.

    June 15, 2011 07:55 pm at 7:55 pm |
  3. GOP = Greed Over People

    You want to stabilize the stock market?

    Raise the debt ceiling and do it now, before the international investors begin to believe that the GOP cons truly want to see "America fail" and in a big way. It is about to be 700 point daily swings at the stock market again, really soon.

    As it becomes more apparent to the ones we count on to buy our debt that indeed the GOP tea baggers are not going to raise the debt ceiling and cause us to default, Greece and it's problems will be a brief memory. With the deadline of 8/2 less than 60 days out, the only ones buying treasuries are the folks fleeing the stock market. The closer we get to the "deadline" the fewer international investors and countries will be willing to take a chance that we MIGHT default,

    And they will not wait until the deadline to stop buying so even if it is raised in the wee hours of 8/1 the damage will already be done and rates will be sky high and The Great Depression will be remembered by our generation as the good ol' days.

    June 15, 2011 07:58 pm at 7:58 pm |
  4. chyke

    Whatever Obama proposes, GOP opposes, even if its what they would have ordinarily supported. The real reason being that they want the economy to tank so badly as it helps their ultimate goal of making Obama a first termer. But eventually, they will be disappointed. Obama will be in the white house beyond 2012. TRUST ME ON THAT!

    June 15, 2011 08:04 pm at 8:04 pm |
  5. Len Smith

    Of course there shouldn't be an extension to the payroll taxcut. Why should the working American get a taxcut when we as Republicans want as much money as possible for taxcuts for the very wealthy? My oh my, they have to pay at a rate of 15% on most of there income and gains. Let the average American bare the burden of carry all the baggage.

    June 15, 2011 08:06 pm at 8:06 pm |
  6. patty

    So they only want lower taxes for the companies and not the workers? These people talk out both sides of their mouths.

    June 15, 2011 08:09 pm at 8:09 pm |
  7. Russ

    Let's see.......payroll tax cuts don't create jobs, but they help poor and middle class people so they're no good. Tax cuts to the Rich don't create jobs, but they're good because why? Oh yea, they benifit the Republicans rich friends. What a freaking bunch of hypocrits.

    June 15, 2011 08:13 pm at 8:13 pm |

    Wow.....the republicans are right, a payroll tax cut does take money out of S.S. and medicare......However it provides extra money to the workers pockets......payroll taxes that employers pay, and that the worker pays, goes to funding S.S. and medicare......However in the short run, a nice cut to these taxes (if you include business also) would give more money to business, and the worker......This is a very nice short term stimulus, and should be extended one more year, or half a year of 2012.
    There does however need to be a long term strategy for job creation, and it can't be done with deficit reduction alone.

    June 15, 2011 08:21 pm at 8:21 pm |
  9. Pat

    Yeah, but cutting taxes to those who have high incomes obviously does work so lets keep doing that.

    June 15, 2011 08:22 pm at 8:22 pm |
  10. once upon a horse

    sure we don't need to extend payroll tax cuts.....we just need to keep giving those BIG tax cuts to the "job creators" you know the ones doing all that hiring now since the Bush tax cuts have been in effect. God forbid we let those cuts expire.

    June 15, 2011 08:23 pm at 8:23 pm |
  11. maine liberal

    "told reporters that the current high unemployment rate is proof that short-term stimulus programs, like the payroll tax reduction, don't work"

    we have had the same tax policy since 2001 how many jobs have been created long term with cuts for millionaires and billionaires.

    June 15, 2011 08:25 pm at 8:25 pm |

    BTW just to correct what I said, ther is already a payroll tax cut in place....a 2% cut in fact......Only for the worker, not the employers. But an extension (for a short time) with a sustantial cut would spur more growth.....
    By the way it is working.
    Obama 2012.

    June 15, 2011 08:25 pm at 8:25 pm |
  13. Nelson

    This should prove to anyone who had not yet figured it out that the Republicans do not give a hoot about anyone who is not rich. The only taxes that should not be cut are the ones that do not affect rich people.

    June 15, 2011 08:38 pm at 8:38 pm |
  14. Charles

    I will bet eliminating OIL SUBSIDIES are NOT on Alexander or Hensarling's to do list!!

    June 15, 2011 08:48 pm at 8:48 pm |
  15. ADOC

    All I have to say is 'Wow'. These guys are kicking and screeming when it comes to extending the proven failure that is the tax cut for the top 2%, but when it comes to something that benefits the middle class, they want to cut the program(s) prematurely. You middle class Republican voters better wake up.

    June 15, 2011 09:03 pm at 9:03 pm |
  16. yikes!

    "I think getting rid of unwarranted tax breaks is a good idea," Alexander said. "We have $1.2 trillion in tax expenditures and some of them aren't justified and they're adding to the debt."
    Where was this attitude when the tax cuts for the rich were extended???

    Maybe we can hold all of our representatives to this standard. Cut oil, cut ethenol, end the rich tax cuts, end most if not all farm subsidies, END corporate welfare!

    June 15, 2011 09:14 pm at 9:14 pm |
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