President Barack Obama scored a major victory at the end of last year by extending the payroll tax cuts an additional two months. The proposal – which would have expired on December 31 – was approved despite staunch Republican opposition. A month into the extension, a bipartisan Congressional panel began deliberations on Tuesday over extending the tax cuts once again until the end of 2012, according to Businessweek. Without action, the current payroll tax extension is set to end after February 29.
In its current form, the extension provides a 2 percent break on Social Security payroll taxes for many middle class Americans – the equivalent of about $20 per week, according to the Washington Times. Unemployed workers can also continue to receive healthcare benefits through Medicare.
However, Congress is still working out how to pay for this initiative. The multifaceted proposal includes several different tax breaks all set to expire (or that have already expired) at different times this year.
"Continuing the payroll-tax cut and unemployment insurance comes down to a basic question of fairness to the middle class," Sen. Jack Reed, Rhode Island Democrat, told the Washington Times. "The middle class has felt the brunt of this economic downturn while many corporations and the wealthiest Americans have been able to take advantage of loopholes."