Congress Returns To Battle on Payroll Tax
As members of Congress return to Washington this week, they face immediate pressure to agree on how to fund a payroll-tax cut, but their task is complicated by lingering hostilities over the issue that are likely to be sharpened by the onset of a hard-fought election year.</br></br>Republicans are frustrated by the outcome of December's fight over the payroll tax, when lawmakers unable to agree on a long-term plan simply extended the break until the end of February. House Republicans complained the move created uncertainty, but were forced to give in on the extension after Democrats depicted them as blocking a tax cut.</br></br>The House returns Tuesday and the Senate next week, and lawmakers will immediately plunge back into the fight over the payroll tax.</br></br>Congress faces a Feb. 29 deadline to extend the popular tax break, which reduces workers' payroll taxes to 4.2% from 6.2%, as well as a program to prolong unemployment benefits. To fund the extension, Democrats had proposed a surtax on millionaires, while Republicans wanted to cut the federal work force by attrition.</br></br>The battle lines have hardened: Democrats believe they have the political advantage and see little reason to compromise. Meanwhile, House Republicans are furious at the latest outcome and are determined not to back down.