White House rips GOP tax-cut plan, but doesn’t threaten veto

The White House on Thursday officially came out against the Senate Republican plan to extend the payroll-tax cuts, but stopped short of threatening to veto the bill should a version of it reach the president’s desk.

Democrats and Republicans in the Senate have offered competing bills, each of which extends or expands the payroll-tax cuts that are currently in place but pays for the tax cuts in different ways.



The Democratic plan would expand the tax break and pay for it by raising taxes on the wealthiest Americans, while the Republican plan would extend the tax break at its current level and pay for it by freezing federal workforce pay and making cuts to some safety-net programs, such as Medicare.


A statement of policy from the Office of Management and Budget went on a two-pronged attack against the GOP plan, saying that merely extending the payroll-tax cut, instead of expanding it as Democrats have proposed, “provides one-third less tax relief for America’s workers” and “does not help America’s small businesses.”

The OMB also argued that the additional cuts in the GOP plan are a breach of the Budget Control Act, passed by Congress earlier this year during the debt-ceiling negotiations, in which the two sides agreed on $1 trillion in spending plus an additional $1.2 trillion in automatic across-the-board cuts, which were triggered after the congressional supercommittee failed to reach a deal as mandated by Nov. 23.


“[The GOP bill] is paid for by unbalanced cuts that would break a bipartisan deal achieved in August,” the OMB said.



The OMB also said the additional spending cuts in the Republican bill “would mean further reductions in areas like education and energy, reducing core government functions ranging from services for this Nation’s veterans to border security, and further cutting back spending on the Nation’s defense.”



The competing bills indicate that despite some early Republican opposition, both sides are committed to at least extending the existing payroll-tax cut — assuming they can come to an agreement on how to pay for it.

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