RightChange: House Blocks Senate Dem’s Temporary Payroll Extension

The House GOP voted to reject the Senate Democrats two-month temporary payroll tax holiday earlier today and called on President Obama to get the Senate Democrats back into town.  President Obama said that a temporary payroll holiday “is the only viable way to prevent a tax hike January 1^st.” He also demanded Republicans compromise on the bill.  We already wrote yesterday about how the Senate bill is hardly a compromise.  Today, we will write about how it is not a “viable way.”

Officials from two groups that actually handle payrolls for businesses said the temporary two-month payroll tax cut passed by the Senate and pushed by President Obama couldn’t be implemented properly.

From abc news:

“Officials from the policy-neutral National Payroll Reporting Consortium, Inc. have expressed concern to members of Congress that the two-month payroll tax holiday passed by the Senate and supported by President Obama cannot be implemented properly.

Pete Isberg, president of the NPRC today wrote to the key leaders of the relevant committees of the House and Senate, telling them that “insufficient lead time” to implement the complicated change mandated by the legislation means the two-month payroll tax holiday “could create substantial problems, confusion and costs affecting a significant percentage of U.S. employers and employees.”

“We’re neutral and we’d be happy to do the work,” Isberg told ABC News.

“The concern is really for those who don’t use a payroll service provider,” he said. Americans will have different outcomes, he said, causing confusion “because they’ll have different outcomes. Some will have it done on time, some won’t, some will have adjustment notices later in the year.”

The NPRC is not the only organization that sees this as a substantial problem.

From the National Review:

“Another group, the National Association of Wholesale-Distributors, writes Congressional leaders to “concur with the conclusion of the NPRC.”

“A two-month extension of the current reduced payroll tax rate, with the implicit rise in that rate in the first quarter of 2011, would exacerbate and escalate the uncertainty about fiscal policies that has inhibited business activity and slowed economic recovery and job creation for the last several years,” the letter states.”

Clearly the Senate’s bill is not the only option capable of working successfully.   There are plenty of other ways to extend a payroll tax cut that can be implemented efficiently, it would just require Senate Democrats to stop vacationing and get back to work in Washington.  Harry Reid said that he would not recess Congress until the payroll tax cut issue was resolved; he ought to stick to that.  Most Americans are working up until Christmas Eve, Senate Democrats should do that same as the common man and the GOP House: Go big then go home!

Back To Blog