Extension offered as gift to U.S.

Congress delivered a last minute two-month employment tax cut extension Friday that will protect 160 million American workers from having an additional 2 percent of their paycheck withheld at least until March 1, 2012.

A back-to-back voice vote headed off public criticism after House representatives insisted on a one-year extension, but Senate members balked as the matter moved to conference committee. The move prevented an immediate tax increase on Jan. 1, 2012.

Republicans from Louisiana called comments made earlier in the week by the head of the state-level opposition political posturing for 2012.

Last Wednesday, Democratic Party Chairman and former Rep. Claude “Buddy” Leach called out Republicans by name and blasted them for returning home for Christmas while legislation that could extend the Bush payroll tax cuts remained unresolved.

“Instead of putting Louisiana families and jobs first by supporting the bipartisan tax cut extension, Louisiana’s Republican Congressmen are bowing to the political needs of a speaker of the house from the state of Ohio,” Leach said. “It’s simply unacceptable for them to impose unnecessary financial worries on Louisiana’s working families by raising their taxes just to play Washington-style politics at their worst.”

Rep. Steve Scalise (R-Metairie) called Leach’s comments a propaganda piece, and said that the fact was that House of Representatives members wanted to extend the payroll tax for a full year. The matter went to conference committee while House members wait for the Senate to act.

The payroll tax refers to a segment of wages withheld from an employee’s paycheck for Medicare and Social Security.

The Social Security part of this withholding has historically been evenly split between employers and employees. With a rate of 12.4 percent, both those who sign and receive a paycheck each paid 6.2 percent.

The Bush tax cut reduced what employees paid to 4.2 percent. That 2 percent tax break was scheduled to expire Jan. 1, 2012.

In December 2010 a deal was struck that would extend the tax break to employees by keeping their portion of payments at 4.2 percent for an additional year while employers continue to pay 6.2 percent. That payroll tax holiday expires at the end of 2011.

A proposal to extend the tax cut another year failed to pass the House, so it was turned over to conference committee with the intention being for the Senate, then the House, to take a final vote on the matter before year’s end.

A Senate bill only extended the cut for two months, to which the House responded by calling the matter a token action that would not be of benefit to anyone.

Democrats pounced on the measure that was placed on hold and claimed Republicans were leaving more than 100 million poor and middle class citizens financially strapped by taxes just in time for Christmas.

“The ball [was] in the Senate’s hands,” Scalise said. “By forming a conference committee the bill [was] out of our hands and [went] back in the Senate. Conference committees are part of our legislative system.”

“Maybe the best defense is a good offense,” Rep. Bill Cassidy (R-Baton Rouge) said of Leach’s comments. “Senate Democrats decided they actually wanted to meet with us to work this out.”

Cassidy said Republicans in the House were ready to return to work on a moment’s notice if the opportunity arose. “I [expected] to be at work over the holidays,” he said.

“Early last week [the House] passed a payroll tax extension and unemployment benefit extension bill with some reforms along with other provisions with a strong bipartisan majority in the House,” Rep. Charles Boustany (R-Lafayette) said. “We sent that bill to the Senate then waited and amended it to a two-month extension. We voted it down and voted to go to conference to resolve the differences. The ball [went] back in the Senate’s court.”

“Once again, Washington politicians [took] the easy way out kicking the can down the road instead of addressing our problems head on, providing long-term certainty, and putting our country back on a path to prosperity,” Rep. Jeff Landry (R-New Iberia) said, “Just like August when Washington politicians voted to raise the debt ceiling, today’s announcement highlights the lack of fortitude from career politicians.

“I am disappointed by Washington’s latest failure because since the debate on this has started, I have fought hard to extend the payroll tax holiday for a year, to extend the unemployment insurance for a year, and to extend Medicare reimbursements to doctors for two years. And I am disappointed the President and Senate Democrats have turned our workers, seniors, and doctors into political pawns for class warfare.”

While Democrats blamed Republicans for a tax cut extension being placed on hold, the Louisiana delegation of Republicans blamed Democrats who they contend wanted the extension to fail so President Barack Obama could blame Republicans for an employment tax increase just in time for his re-election bid.

“There [was] nothing else for the House to do until the Senate [took] action,” Scalise said. “The Senate just needs to appoint conferees. If this [had not been] resolved by Jan. 1 the [tax portion for employees] would have gone back up to 6.2 percent. The clock is ticking, but we’ve done all we can do.”

Another issue joined with the tax extension is a potential 27 percent cut physicians face with Medicare reimbursements starting Dec. 31. “We are already seeing access problems because reimbursements by Medicare are not meeting costs in many instances,” Boustany said. “If a massive cut like this comes into place we could see serious access problems for seniors and folks with disabilities. These are things that need to be dealt with.”

The Associated Press contributed to this report.