McConnell: Payroll Tax Cut Deal Will Get Done

After two weeks of bipartisan sniping between Senate Democrats and House Republicans, leaders in both parties are asserting a deal can be made over the payroll tax cut extension -- but their progress to-date has proven to be less than convincing.

On Fox News Sunday, Senate Minority Leader Mitch McConnell, R-Ky., said Congress would definitely extend a payroll tax cut before the end of the year, when it is due to expire and revert to its 6.2 percent rate.

I believe that we should extend the payroll tax holiday another year, McConnell said, adding there should be a provision specifically for job creation.

The extension of the tax cut, which would largely benefit middle class Americans, has become a bulwark issues for Democrats, who insist on covering the cost of the legislation by imposing a surtax on high income earners. Senate Democrats adopted the bill, a major chunk of Obama's languishing jobs plan, two weeks ago and have hoped to portray Republican opposition as defenders of the rich, in a populist light in their favor.

Lack of Extension Would Cost Many Families $1,500 Per Year

Obama has pushed Congressional members to remain in the Capitol until a palatable deal is signed, promising to skip his usual holiday jaunt to his home state of Hawaii if necessary. If Congress fails to reach an agreement by the new year, the payroll tax will return to its old 6.2 percent rate, costing many families about $1,500 per year.

A bill shaped by House Speaker John Boehner, R-Ohio, will be introduced to Congress this week. The legislation is laced with pet Republican projects, including the hurried passage of the controversial Keystone XL pipeline, the sale of broadband spectrum, and changes in social safety net programs, in an effort to make palatable a tax cut Republicans otherwise oppose.

The effort represents a last-ditch attempt to tie together a number of provisions, that if expiring, will hit millions of Americans with a tax increase, decrease doctors' Medicare payments and end an extension on jobless benefits.

Despite McConnell's optimism, little legislative red meat is on offer to Senate Democrats, who have been mum on how acceptable Boehner's bill would be if brought to the floor.

Four other attempts at extending the cut died in the Senate, as bills introduced by both parties failed to garner the 60 votes needed to overcome a filibuster.