Business, Government Legal News from throughout WVCongress passes bipartisan measure to extend payroll tax cuts

In a highly-anticipated move, the U.S. Congress on Feb. 17 passed a bipartisan plan to extend payroll tax cuts set to expire at the end of February.

The Republican-led U.S. House of Representatives passed the plan 293-132 while the Senate passed it 60-35. The bill would extend the payroll tax cuts, first enacted at the beginning of 2011, through the end of 2012. President Barack Obama and Congressional Democrats supported a plan in December to extend the tax cuts, but Republicans and some Democrats weren't so eager to support the extension, citing Social Security concerns.

"I want to make sure that hardworking families have more money in their pockets — but this temporary policy is the absolute wrong way to do it because it cripples Social Security," said Sen. Joe Manchin, D-W.Va. "I know that going back home and saying we voted for tax cuts is popular, but this is not a tax cut — this is a Social Security cut, plain and simple."

However Manchin's colleague in the Senate, Sen. Jay Rockefeller, also D-W.Va., has maintained throughout the debate that payroll tax cut extensions will not harm Social Security.

"I've said that we need to make sure that workers get some relief in this tough economic climate," he said. "The payroll tax cut will help make that possible by keeping more money in their paychecks each week. It also assists those out of work and searching for jobs to stay on top of their bills and put food on the table. Importantly, as AARP made clear, Social Security is fully protected. I'm relieved that West Virginia families should soon know this help will be available for the rest of the year."

Employees across the country pay a portion of their paychecks into these payroll taxes which in turn fund programs such as Social Security. The 2011 cut reduced the amount of taxes these employees would pay, but the federal government pays the same amount into Social Security in place of the taxes. According to Rockefeller, "letting the payroll tax go back up now would mean smaller paychecks for every West Virginian starting in March" which could slow the economy and stymie job creation.

Members of the U.S. House were also split in their votes. Both Reps. Shelley Moore Capito, R-W.Va., and Nick Rahall, D-W.Va., supported the bill while Rep. David McKinley, R-W.Va., voted against.

Capito, the co-founder of the Congressional Civility Caucus, said she heard from West Virginia seniors just how important Social Security and similar programs are to them and her concerns the bill would harm Social Security "were alleviated."

"This agreement ensures doctors who treat Medicare patients don't see their reimbursement rates slashed, ensuring our seniors have access to good doctors and good health care," she said. " I was adamant that the Social Security Trust Fund be protected in this plan."

Rahall said there are a few provisions he disagreed with, but he understands the responsibility he has to help working families.

"There are a number of provisions I oppose in this measure and the American people deserve better than a litany of intermittent stop-gap measures," Rahall said. "Nevertheless, we have a responsibility to ensure that Medicare payments for health care providers and unemployment benefits for working families are not interrupted. This measure will avert a painful tax increase next month while ensuring there is not interference with the Social Security benefits that are supposed to be paid to retirees and workers. The Social Security Trust Funds are protected and preserved."

However, McKinley called the measure a "band-aid" that could jeopardize Social Security and add $89 billion to the national debt.

"This payroll tax holiday has been in effect for more than a year and woe don't have much to show for it," he said. "It's not worth jeopardizing the Social Security Trust Fund again and putting $89 billion in more debt to implement an election year band-aid that doesn't work. Nearly 13 million Americans are currently looking for work and our unemployment rate lingers close to Great Depression levels. There is simply no evidence that proves a temporary extension will solve our economic misfortunes."

The bill will now go to Obama for his signature.