The Senate on Thursday rejected competing offers from both Republicans and Democrats to extend payroll tax cuts as both parties are try to avoid a $1,000 tax hike following the New Year.

Both bills met with GOP opposition.

As reported in the LA Times, Republicans blocked President Obama’s proposal to extend the payroll tax breaks to $1,500 for 2012, extending it to employers who hire new workers, paying a 3.25 percent surtax on those earning more than $1 million a year.

Two dozen Republicans then joined all Democrats in rejecting the GOP leaders’ offer by a vote of 78 to 20. The proposed bill would have ended to tax cuts for people earning more than $1 million, continued a freeze on federal employee salaries, and cut the government workforce.

President Barrack Obama said the Republican opposition was "unacceptable."

"They refused to ask a few hundred thousand millionaires and billionaires to pay their fair share," he said in a statement.

"It makes absolutely no sense to raise taxes on the middle class at a time when so many are still trying to get back on their feet."

McConnell Touts GOP Approach

Republican Senator Mitch McConnell thinks that the Republicans introduced what they believe, “is a much smarter approach to extending the temporary payroll tax cut than the one proposed by Democrats involving permanent tax hikes on job-creators.”

McConnell said in a statement that both Democrats and Republicans shouldn’t have to suffer for the President’s “failure” for the economic job crisis.

He thinks that “struggling American workers” should continue to get a temporary relief for another year but he also believes that there is “no reason we should pay for that relief by raising taxes on the very employers we’re counting on to help jolt this economy back to life.”

Instead he said they have a better idea that will work for both Republicans and Democrats.

“Anybody who makes more than a million dollars a year shouldn’t be getting an unemployment check on top of it, paid for with the tax dollars of folks struggling just to make ends meet.”

“No more unemployment checks or food stamps for millionaires,” he said.

He then proposed that they will be giving “folks like Warren Buffet” the opportunity to help offset the relief through the temporary extension of the payroll tax cut that would allow people to voluntarily help pay the federal debt on their tax return calling this plan “the kind of balanced plan Americans are looking for.”

“It’s focused on helping middle-class Americans without asking them to fund benefits for the wealthiest among us,” said McConnell.


Democratic Senate Harry Reid said that he was surprised to see that Republicans questioned whether they believed in middle-class tax cuts at all.

“Republicans proved tonight they are more interested in tax cuts for millionaires than tax cuts for the middle class,” said Reid in a statement.

He said that although Republicans spent the last week trying to convince them that they support middle-class tax cuts, a “majority of Senate Republicans voted against their own bill – calling into question whether they support middle-class tax cuts at all.”

“I was encouraged to see one Republican join Democrats in asking millionaires to pay their fair share. But because every other Republican continues to insist on protecting millionaires, middle class families could face a $1,000 tax increase next year,” said Reid.

“Democrats will not stop fighting to avoid that outcome,” he added.

“I hope Republicans will decide that the economic security of hard-working Americans is more important than protecting the wealthiest one percent.”