Payroll Tax Cut

Tuesday, December 6, 2011 - 10:15am

Congress continutes to debate the payroll tax cut.

In Washington, we're skating toward a deadline at the end of this month when your payroll taxes will go up 2%.

Democrats and Republicans both say they want to prevent that, but can't agree on how to pay for continuing this year's tax break.

Democrats laid out their plan. Republicans are working on theirs. And President Obama is hoping to evoke history today with a speech to put the pressure on. "My message to Congress is this: Keep your word to the American people and don't raise taxes on them right now. Now is not the time to slam on the brakes; now is the time to step on the gas," said President Obama.

We'll likely hear something similar today when President Obama speaks in a small town in Kansas -- the same place President Roosevelt delivered his popular "square deal" speech.

Mr. Obama is pushing for congress to extend the payroll tax cut and unemployment benefits. It'll cost 180 billion dollars over a decade.

On Monday, Democrats unveiled their plan to pay for it:

- No payroll tax-break for businesses

- New fees on Freddie mac and Fannie Mae mortgages

- No unemployment or food stamps for millionaires

- And the controversial tax on millionaires - but a smaller one.

Republicans want to pay for the tax cut by freezing pay and raising pension costs for federal workers, but republican leaders have signaled compromise. "That is a sign that ultimately they are going to be able to get majorities in both chambers to go along with what the President wants." CNBC Chief Washington Correspondent John Harwood

But some republicans oppose the millionaire tax. "It's bad economic policy, it's bad tax policy, and certainly the surtax that would fund this is something that would very much hurt small business and job creation." Senator Jon Kyl/ (R) Arizona

The White House has posted a count-down clock on its website, noting how many days are left till your payroll taxes go up.

Tracie Potts, NBC News, Washington.

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