–Senate Majority Leader Reid: ‘This Is A Serious Proposal’
–Sen. Reid: ‘Mix’ of Spend Cuts, Tiny Tax Hike Would Pay For Plan
–Sen. Reid: Dems Have Made ‘Meaningful Concessions’

By John Shaw

WASHINGTON (MNI) – Senate Majority Leader Harry Reid said Monday
that Senate Democrats will offer a revamped plan to extend the payroll
tax cut, adding that the package will be “fully payed for with a mixture
of spending cuts Republicans have already agreed to and a tiny, tiny
surtax on the top 2% of American taxpayers.”

In remarks on the Senate floor, Reid said the new Senate Democratic
plan is an attempt to bring the two parties together on extending the
payroll tax cut.

“Republicans need to be prepared to meet us partway. We’re offering
a serious proposal with meaningful concessions, including spending cuts
to which Republicans have already agreed,” Reid said.

“This is a serious proposal and Republicans should take it
seriously,” Reid added.

The Senate Democratic plan is expected to cost about $180 billion.

House Republicans are preparing an alternative payroll tax
extension package that would cost about $200 billion and would be paid
for by entitlement and other savings.

Last year, the White House and Congress agreed on a tax cut package
that included reducing for one year the employee-paid share of the
Social Security tax from 6.2 percent to 4.2 percent.

Obama and most Democrats in Congress wanted to further reduce the
employee payroll tax to 3.1 percent and to cut the employer share of the
payroll tax from 6.2 percent to 3.1 percent for the first $5 million of
a company’s wage costs.

Last week, Senate Democrats failed to pass legislation that would
have enacted this extension and paid for it by imposing a surtax on
individual income over $1 million.

A Senate Republican plan to extend the payroll tax cut by a freeze
on federal salaries and hiring also failed last week.

The new Senate Democratic plan drops the employer payroll tax cut
and pays for the entire package with non-health care entitlement savings
and a temporary surtax on income about $1 million.

The two parties are expected to spend much of the next two weeks
battling over the details of renewing the payroll tax cut and other
expiring tax provisions.

** Market News International Washington Bureau: (202) 371-2121 **

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