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Payroll-Tax Cut Backup Plan Prepared in Case Negotiations Fail

Bloomberg (02/03/12) James Rowley

Senate Democrats are devising a backup plan to extend a payroll tax cut and emergency unemployment benefits that are scheduled to expire in coming weeks if discussions with the Republican-controlled House of Representatives do not culminate in a deal. The House-Senate negotiators “understand there is a backup plan” being drafted by Senate Democratic leaders, says Senate Majority Leader Harry Reid (D-NV). “If we have to put it forward, we will.” If Congress does not make a decision by Feb. 29, the payroll tax for employees will increase by two percentage points.