Senate Dems Push Obama's Payroll Tax Cut

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Democrats want to extend the payroll tax cut that went into effect this year, a two percent cut that is currently set expire at the end of the year.

They are pushing a bill that would extend the tax cuts and raise it to three percent, as a part of President Obama's plan to cut in half every worker's payroll taxes next year.

Obama's $248 billion plan would trim Social Security payroll taxes from 6.2 percent to 3.1 percent.

It also would cut in half the 6.2 percent tax paid by employers on the first $5 million of their payroll.

However, Democrats would add a permanent tax of 3.25 percent on people with incomes more $1 million, as well as taxing incomes on small businesses.

Republicans say they are against such a proposal that would likely hurt the economy.

"Any attempt to pass another temporary stimulus funded by a permanent tax hike on the very people we're counting on to create the private-sector jobs we need is purely political, and not intended to do a thing to help the economy, since we all know it's likely to fail with bipartisan opposition," Senate Minority Leader Mitch McConnell, R-Ky., said Monday.

A spokesman for Senate Majority Leader Harry Reid, D-Nev., office said Democrats will hold a test vote on the plan later this week.

Democrats say even if the measure fails to pass, they'll try again even if it means coming up with a different way to pay for the tax cut.

Many economists say that allowing the tax cut to expire is likely to do at least some damage to the economy.

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