* These include some who opposed extension last year
* This year's fiscal cliff forces a second look
By Rachelle Younglai and Kim Dixon
WASHINGTON, Dec 12 In a turnabout from a year
ago, some Republican lawmakers say they are open to backing
President Barack Obama's proposal to extend the payroll tax cut
for a third year, possibly bringing the sides closer to a deal
to avoid the fiscal cliff.
Last year Speaker John Boehner, the leading Republican in
the House of Representatives, suffered through a revolt by
ultra-conservative Republicans opposing the cut. They argued
cutting the payroll tax would add to the deficit and hurt the
retirement program it helps finance.
That was last year. This is this year.
"It depends on how it is put out, said New York
Representative Tom Reed, one of the Republicans who opposed a
Boehner-brokered deal to extend the cut last year. "I think
lower taxes is always better policy, so we are interested in
looking at lessening the tax burden on all Americans."
Introduced by Obama two years ago as an economic stimulus,
the tax holiday reduced an employee's share of the payroll tax
from 6.2 percent to 4.2 percent, giving workers an extra few
dollars to spend and possibly help get the U.S. economy back on
The nonpartisan Tax Policy Center estimates that expiration
of the payroll tax cut will raise taxes an average $700 per
"I feel like we are in a bind," Representative John Fleming,
a member of the conservative Tea Party Caucus, said on Tuesday.
The Louisiana Republican said he was torn between what the tax
break was "doing to our trust fund and the need to keep money in
the pockets of Americans."
The payroll tax cut was meant to be temporary and is now set
to expire on Dec. 31 together with other lower income tax rates.
They are key elements of the so-called fiscal cliff, a
combination of tax increases and automatic spending cuts that
risk triggering another recession.
Last year's tug-of-war with Obama turned into a public
relations headache for Republicans, who were in the unusual
position of opposing a tax cut that benefits the middle class.
They said they were worried about the impact on the deficit and
social security funding, but relented to a year-end extension,
Obama proposed extending it further when he put forward his
proposal for avoiding the fiscal cliff last month.
Many Republicans - along with some senior Democrats -
oppose the extension, in part because it funds the Social
Security retirement program.
The Social Security fund is on track to start going bankrupt
in 2033 and Democrats and Republicans agree that the program has
to be altered to ensure that retirees are not left without
Boehner has not publicly ruled out an extension of the
payroll tax holiday. Should he accept the White House request as
part of a deal, he will need support from rank and file
Republicans in the House of Representatives.
Ohio Representative Jim Jordan, leader of a large group of
House conservatives, said if lawmakers were asked to simply vote
on the extension, he would vote for "keeping it because I view
it as a tax cut."
At the same time, Jordan said the tax should eventually
revert back to 6.2 percent in the context of a broad reform of
Representative Steven LaTourette, a moderate Republican from
Ohio, said he would be open to a payroll tax extension if it was
part of a package that would include a minimum of $4 trillion in
deficit reduction over 10 years.
In the Senate, Republicans Rob Portman of Ohio and Jon Kyl
of Arizona also did not rule it out and said support of an
extension would depend on the final deal. "Everything depends on
what's in the package and how it all works together," Kyl said.
Ron Johnson, Republican senator from Wisconsin, said: "I
support extension of all current tax rates, that's what we
should be doing."