Rockefeller Votes for Compromise Payroll Tax Cut Bill

Press Release

Senator Jay Rockefeller today voted in favor of a new compromise bill, which he cosponsored, to prevent an increase in payroll taxes for more than 900,000 West Virginia families next year. The plan failed today in the Senate.

The proposal incorporates bipartisan ideas intended to help families facing a tax hike on January 1. If Congress does not approve a payroll tax plan, West Virginians and Americans face what amounts to a tax increase averaging $1,000 next year. Economists estimate that the bill could create 700,000 new jobs and potentially save many more.

"It's critical that we take action to help the millions of working families who are struggling by putting money in their pockets," said Rockefeller. "This bill would also create jobs throughout the country, provide immediate economic benefits, and fully protect Social Security. That's a key point, because nothing is more important to me than the integrity of the Social Security Trust Fund. Social Security is and always will be a vital safety net for older Americans and people with disabilities.

"It's long overdue for Congress to come together around real solutions, and this bill incorporates both Democratic and Republican ideas. I have continued to stand for struggling West Virginians and creating jobs, and that will never change. Now more than ever, families need immediate assistance to make ends meet. Robin from Morgantown already has two jobs and without the payroll tax extension, she will need to get a third job as she won't have the money to pay for maintenance on her car, which she needs to get to her jobs. Robin is not alone and I'm committed to finding a solution for people all across West Virginia who face similar situations."

The current two-percent payroll tax break is scheduled to expire at the end of this month. The new bill would continue the payroll tax cut for employees into next year, and boost it to a 3.1 percent break. Without this bill, most working families will have to pay at least $1,000 more in taxes. Not only would this bill prevent a tax hike, but it would also increase the amount that families take home by $500, putting a total of about $1,500 back in families' pockets so that they can pay their bills, put food on the table, and afford medical expenses.

Click here to view six important facts about the payroll tax cut extension.

Details of the Compromise Bill:

Still Protects Social Security and is Fully Paid For. That means that the Social Security Trust Funds will not lose one dime because of this tax cut for working families. The Social Security Trust Funds are U.S. Treasury bonds, among the safest investments in the world. The Social Security Trust Funds are secure until 2036 according to the Trustees Report.

Reduces the Size of Package by Roughly One-Third. To address Republican concerns that the overall package was too large, the compromise legislation will no longer provide a tax break for employers. The bill still cuts in half (from 6.2% to 3.1%) the Social Security payroll tax paid by employees and the self-employed for 2012. Approximately 160 million workers will benefit from this tax cut, with the average family seeing nearly $1,500 in additional take-home pay.

Adopts Bipartisan Deficit-Reducing Proposals from the Super Committee Negotiations. To help pay for the bill, this proposal will increase the fees that housing giants Fannie Mae and Freddie Mac charge mortgage lenders to guarantee repayment of new mortgage loans.

Reduces the Surtax on Millionaires. The new compromise bill further modifies the millionaires' surtax to appeal to even more Republicans. It pares down the surtax on incomes over $1 million from 3.25% to 1.9% and also makes the surtax temporary, rather than permanent.

Adopts Republican Proposal to Prevent Millionaires from Receiving Unemployment Benefits and Food Stamps. The compromise bill includes a cost-saving reform that would make millionaires ineligible for unemployment compensation and food stamps.

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