Social Security Payroll Tax Reduction To End Soon

Many Americans could see a bigger bite out of their paychecks unless Congress votes to continue the suspension of the Social Security payroll tax. The tax holiday, enacted to stimulate people to spend money in a bad economy, is scheduled to expire at the end of this year. Senate Democrats plan to try to extend the tax break and pay for it by charging a new tax on the very wealthy.

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RENEE MONTAGNE, HOST:

And I'm Renee Montagne.

Many Americans could receive less in their paychecks in January, unless Congress extends a reduction of the Social Security payroll tax. This week, Senate Democrats will try to continue that tax holiday and pay for it by charging a new tax on the very wealthy. Though no one expects the bill to pass, it is the kind of political maneuvering that can be expected, now that Congress's supercommittee has failed to reach a deficit reduction plan.

For some analysis, here's NPR's Cokie Roberts who's with us most Mondays. Good morning.

COKIE ROBERTS, BYLINE: Hi, Renee.

MONTAGNE: Why are the Democrats bringing up a measure that they know will not pass?

ROBERTS: Well, because as you just said, they want to make the political point. They think that the tide of the conversation in the country has shifted; that it's moved from let's cut, to wait a minute, who are you cutting and why - and income disparities. They don't say that the Occupiers have changed the conversation, because then - not sure that works for them politically. But they think that that might have happened.

They know that polls show majorities of Americans, including majorities of Republicans, think that a tax on millionaires is OK. So yesterday, on Fox News Sunday, when Arizona Republican Jon Kyl said he would oppose the extension of the payroll tax holiday, saying that he didn't think that the break helped to stimulate the economy, Dick Durbin was ready to pounce.

SENATOR DICK DURBIN: I can't believe, that at a time when working families in this country are struggling paycheck to paycheck, when we need them to have the resources to buy things in our economy, to create wealth and profitability and more jobs, that the Republican position is they'll raise the payroll tax on working families? I think that just defies logic.

ROBERTS: That's what you're going to be hearing from now until Election Day next year.

MONTAGNE: Well, aside from the politics of the question, what's likely to actually happen to the payroll break? Will it be extended or not?

ROBERTS: Well, it's hard to see how you tell people at Christmastime that they're going to get socked by somewhere between a thousand to $1500 for middle income families.

The Social Security payroll tax is not only issue Congress has to deal with before the end of the year. There's the extension of unemployment insurance; there's dealing with what they have to do every year, the alternative minimum tax, which would hit too many people if left alone; there's what's called the Doctor Fix on Medicare, where they need to not cut doctors' fees the way they're scheduled to go.

You put all that together, it is a great big expensive bill. What I'm curious to see is what happens with House freshmen on this. Do they hang tough the way they did on the debt limit and try to not let any of these popular things go into effect? Or, now that we are officially in the last year before the election, do they just let it go and go home and campaign?

MONTAGNE: And, speaking of the election, let's turn to the presidential race. The Iowa caucuses happen in just over a month and the New Hampshire primary is the week after that. Over the weekend, the influential New Hampshire newspaper, the Union Leader, made its preference known.

ROBERTS: Yes, and they endorsed Newt Gingrich, the former speaker of the House, saying they prefer a candidate they don't always agree with to one who's says what he thinks they want to hear. An obvious slap at Mitt Romney, who worked hard for the Union Leader endorsement.

Now, the Union Leader doesn't always endorse the winner. But Newt Gingrich is having a day in the sun. Bill Clinton - the president he sparred with - said that he has good ideas but that they some times get him in trouble with people who have ideology not philosophy. And that certainly happened last week, when Gingrich talked about immigration.

In the long run though, on that issue, I think the person who is in the most trouble is Mitt Romney and the Republican Party, going into the general election.

MONTAGNE: Thank you very much. That's NPR's Cokie Roberts.

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