WASHINGTON — Debate over extending the payroll tax cut for 170 million workers has become an exercise in political maneuvering as Republicans reluctant to go along with President Barack Obama's plan worry that they'll be accused of raising taxes on the middle class if they don't.
Rep. James Lankford, R-Oklahoma City, said there is a sense among Republicans that refusing to extend the payroll tax cut — enacted as a temporary measure last year — would be viewed as a tax increase.
“The pure optics are part of this, obviously,'' Lankford said.
Rep. Tom Cole, R-Moore, said partisan sniping over the details of a package to extend the tax cut and long-term unemployment benefits may leave people wondering whether lawmakers were “really trying to secure tax relief or score political points.”
Cole said Republicans were trying to find common ground with Obama, even though many were not enthusiastic about the extensions, but that the president was still “going to rail and demagogue on it.”
“There are going to be a lot of twists and turns and some sharp disagreements before it's over,” Cole said.
There already are very sharp disagreements, as Democrats want to raise taxes on millionaires to make up for the payroll tax money diverted from Social Security — something Republicans oppose. House Republicans want an expedited decision from Obama on an oil pipeline before backing the tax cut extension, while Democrats don't want the pipeline in the package.
Rep. Dan Boren, D-Muskogee, said, “Which party comes out as the winner in this has yet to be determined.”
Boren's position is more aligned with that of many Republicans. He doesn't think the payroll tax cut enacted last year is big enough for many people to notice since, for the average family, it is less than $1,000 spread out over 12 months.
But he may be willing to back another year of the payroll tax cut if the provision for expedited consideration of the Keystone XL pipeline is part of the package. The proposed 1,700 mile pipeline would run from Canada, through Oklahoma, to the Texas Gulf Coast.
AT A GLANCE
The payroll tax divide
Last year, Congress and President Barack Obama agreed to reduce the payroll tax that funds Social Security from 6.2 percent to 4.2 percent for a year, giving the average family $1,000 more in take-home pay. That cut is set to expire on Dec. 31.
Obama wants the tax cut extended for another year and he wants another extension of long-term unemployment benefits, which can last 99 weeks in some states.
Senate Democrats have proposed reducing the payroll tax to 3.1 percent for 2012. They would replace the money lost to the Social Security Trust Fund by imposing a 1.9 percent surcharge on income over $1 million. Their bill also includes an extension of unemployment benefits.
House Republicans have introduced a package that would retain the tax cut at 4.2 percent and replace the lost Social Security money by freezing federal worker pay, cutting some funding for the 2010 health care law and introducing more means testing in Medicare. They would also extend unemployment benefits, though they would gradually reduce the amount of weeks granted to 59 for most states.
The Republican bill also includes a provision that would require Obama to make a decision within 60 days on the proposed pipeline to carry oil from Alberta, Canada through Oklahoma to the Texas Gulf Coast.