Boehner says payroll tax cut good for economy

WASHINGTON Thu Dec 1, 2011 6:28pm EST

Speaker of the House John Boehner talks during a news conference to discuss the American Energy & Infrastructure Jobs Plan on Capitol Hill in Washington November 17, 2011. REUTERS/Kevin Lamarque

Speaker of the House John Boehner talks during a news conference to discuss the American Energy & Infrastructure Jobs Plan on Capitol Hill in Washington November 17, 2011.

Credit: Reuters/Kevin Lamarque

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WASHINGTON (Reuters) - The top Republican in Congress said on Thursday that extending a payroll tax cut for workers would boost the U.S. economy, putting himself at odds with members of his party who are skeptical of its benefits.

Minutes after declaring "I'm not an economist. I don't know what kind of impact it's going to have," Speaker of the House of Representatives John Boehner said renewal of the tax cut would be economically beneficial.

"I don't think there is any question that the payroll tax relief, in fact, helps the economy, in allowing more Americans ... to keep more of their money," Boehner said when pressed by reporters.

Boehner's comments, quickly welcomed by the White House, were in sharp contrast to what members of his party were saying just days ago.

Many Republican lawmakers are skeptical that extending the tax cut beyond this year will help job creation and say it will have only a temporary effect on the economy.

The White House, investment banks and some economists have warned in recent days that U.S. economic growth could suffer in 2012 if the cuts are allowed to expire.

Until earlier this week, Republicans had been lukewarm to extending the payroll tax cut, but they have come under political pressure to do so in advance of the 2012 presidential and congressional elections.

"Republicans have finally felt the heat of doing something about the payroll tax cut," said House Democratic Leader Nancy Pelosi.

But Boehner said his party was sticking to its demand that the tax cut be paid for and not add to the country's $15 trillion debt.

Obama has proposed a tax increase on wealthy Americans, but Republicans have rejected that, saying it would hurt business owners who generate jobs.

White House spokesman Jay Carney called it progress that Boehner backed extension, but he rejected a Senate Republican plan to pay for it as an "unbalanced approach."

Senate Republicans offered a plan on Wednesday to cover the projected $120 billion cost of extending the tax cut. It would continue a pay freeze for federal workers through 2015 and gradually reduce the federal workforce by 10 percent.

The Senate could begin voting as early as Thursday evening on competing funding plans by Democrats and Republicans. Both proposals will likely fail, triggering intensive negotiations on a compromise.

Without congressional action by December 31, the payroll tax that workers pay would revert to 6.2 percent, up from the current, temporary 4.2 percent tax. On average, it would cost American families about $1,000 a year.

(Additional reporting by Donna Smith, Rachelle Younglai and Caren Bohan; Editing by Ross Colvin and Eric Walsh)

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Comments (4)
Kah wrote:
Well, it will help BOEHNER’S economy…..

Dec 01, 2011 3:07pm EST  --  Report as abuse
bcaka wrote:
Lower taxes on the seriously rich have NEVER supported job growth, this has been the case since St. Ron first peed on the middle class in 1980 (trickle down, uh huh). The republinoids are simply trying to destroy the USA and return us to the serfs & lords society of a few hundred years ago.

Dec 01, 2011 3:59pm EST  --  Report as abuse
EBB wrote:
“Boehner said his party was sticking to its demand that the tax cut be paid for and not add to the country’s $15 trillion debt.”

Was the tax cut for the wealthy paid for in this manner? Or are we still waiting for the U.S. economy to be stimulated?

While I can’t claim to have all of the answers, I do believe in a balanced and consistent approach. Preaching dogma only when it’s convenient is abhorrent. But, then again, I’d expect nothing less from Washington.

Dec 01, 2011 4:12pm EST  --  Report as abuse
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