Payroll Tax Cut Idea Joins Debt Talks; White House Floats the Notion of Extending and Widening the Breaks to Stimulate Economy; Lukewarm GOP Response
President Barack Obama is considering how strongly to push for extending a payroll-tax break for workers and creating a new tax break for employers to jump-start the economy, reflecting White House concerns about joblessness but also complicating efforts to rein in the federal deficit.</br></br>White House officials brought up the idea during closed-door debt talks Tuesday with a bipartisan group of lawmakers, people familiar with the meeting said. They told the lawmakers that the White House would be open to payroll tax breaks for employers and employees, sending a clear signal that fresh concerns over slowing job growth have spilled into discussions about how to reduce the deficit.</br></br>Supporters of such tax breaks believe they spur job growth, which could improve the country's fiscal footing over time. But the provisions could make the budget deficit--projected to rise to $1.5 trillion this year--worse in the short term. White House press secretary Jay Carney said Tuesday the tax breaks were "certainly worth looking at."</br></br>Vice President Joe Biden said the group had made "real progress" Tuesday in its efforts to craft a budget deficit reduction plan by July 1, which would clear the way for lawmakers to raise the government's $14.29 trillion borrowing limit. Mr. Biden said, "We're down to the real tough stuff now and everybody's still in the room. We're going to meet all week."</br></br>However, the payroll tax idea received a lukewarm response on Capitol Hill, where efforts are concentrated on deficit reduction. House Majority Leader Eric Cantor (R,. Va.), a member of the Biden panel, said on Monday that "we have been very focused on trying to see where we can reduce federal spending."