STATEMENT OF ADMINISTRATION POLICY
S. 1944 – Middle Class Tax Cut Act of 2011
The Administration strongly supports passage of S. 1944, which would continue and expand the payroll tax cut in place this year and put more money in the pockets of working and middle class Americans. The President proposed this measure to the Congress as part of the American Jobs Act as a way to create jobs and spur economic growth.
By extending and expanding the payroll tax cut, the bill would cut in half the amount of payroll tax paid by employees and the self-employed on their wages and salaries for 2012. Approximately 160 million workers would benefit from this tax cut, which would increase the size of the payroll tax cut for a family earning $50,000 from $1,000 in 2011 to $1,500 in 2012.
S. 1944 is paid for through a balanced and fair set of measures, including asking the Nation’s wealthiest to contribute a small percentage more and modestly increasing the fees that Fannie Mae and Freddie Mac charge mortgage lenders to guarantee repayment of new mortgage loans. What is most important is putting Americans back to work, and S. 1944 would meet the test of paying for the extension and expansion of the payroll tax cuts in a way that is fair.
If the Congress does nothing, the typical working family will see its taxes go up by $1,000. Independent economists have confirmed that these tax cuts for working families would add hundreds of thousands of jobs to the economy next year. By enacting S. 1944, the Congress and the President can work together to create jobs, and the Administration urges prompt and favorable action.
STATEMENT OF ADMINISTRATION POLICY
S. 1931 – Temporary Tax Holiday and Government Reduction Act
(Sen. Heller, R-Nevada)
In the American Jobs Act, the President proposed to continue and expand the payroll tax cut in place this year to help provide relief to working families and boost the economy. Passage of S. 1944, the Middle Class Tax Cut Act of 2011, would enact these tax cuts into law and fully pay for them, in part by asking the Nation's wealthiest to contribute a small percentage more.
The Administration recognizes that S. 1931 would at least continue this year's payroll tax cut. However, the Administration opposes S. 1931 because, by contrast to S. 1944, it provides one-third less tax relief for America's workers and is paid for by unbalanced cuts that would break a bipartisan deal achieved in August and would undermine the Nation's ability to invest in areas that are key to America's future, to maintain core government functions, and to defend the United States.
If the Congress does nothing, the typical working family earning $50,000 will see its taxes go up by $1,000. Under the American Jobs Act and S. 1944, that family's tax cut would be increased from $1,000 to $1,500. By contrast, S. 1931 does not expand the current payroll tax cut at all, thus providing one-third less tax relief to 160 million American workers.
While S. 1944 proposes to fully pay for the tax cuts in a balanced and fair way, S. 1931 would almost entirely pay for the payroll tax cuts by breaking the bipartisan deal achieved in the Budget Control Act. It would add new cuts on top of the $1 trillion in reductions to defense and non-defense spending under the Budget Control Act and the additional $1.2 trillion in cuts that could automatically go into place because of the failure of the Joint Committee on Deficit Reduction.
The additional spending cuts under S. 1931 would mean further reductions in areas like education and energy, reducing core government functions ranging from services for this Nation's veterans to border security, and further cutting back spending on the Nation's defense. The President is committed to providing tax relief to America's workers next year and fully paying for this relief in a way that is fair. The Administration strongly supports S. 1944 and opposes S. 1931.
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