“Democrats didn’t insist on that [higher taxes for the wealthy] in December,” Hoyer said at his weekly press briefing on Monday. “That is – I think – what we think is the wisest way to proceed but obviously in the Senate they don’t have a majority for that proposition.”
The payroll tax cuts were extended for two months in December after Senate negotiators determined they could not reach a compromise on a year-long extension before the tax cuts expired on Dec. 31, 2011.
Congress has until the end of February to negotiate an extension for the remainder of the year or payroll taxes will rise on every working American. Both Republicans and Democrats support extending the tax cuts through 2012, leaving only the details of how to offset them left to negotiate.
Hoyer said there would be a compromise of some kind but would not comment on what Democrats might be willing to accept in terms of federal spending cuts to offset the lost revenue.
A conference committee has been appointed but has not started formally meeting yet to hash out how the payroll tax and a separate provision – the so-called Medicare Doc Fix – will be offset.
Under the current situation, the Social Security payroll tax for most employees is at 4.2 percent of wages through the end of February. Without a new deal, it will return to 6.2 percent.