Sen. Kyl: Payroll tax cut extension wrong way to boost job creation

Sen. Jon Kyl (R-Ariz.) gave a bleak assessment of the usefulness of extending an expiring payroll tax cut on Sunday, offering a preview of the next fight likely to embroil Congress.

"The payroll tax holiday has not stimulated job creation. We do not think that is a great way to do it," Kyl said on Fox News.

Kyl, who served on the supercommittee, said it didn't make sense to impose a higher tax on those who create jobs, preempting the argument from Democrats that additional stimulus measures should be paid for by increasing the tax rate on wealthier Americans.

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"I can't believe that," said Sen. Dick Durbin (D-Ill.), also on the program. "Now the Republicans are walking away from lower- and middle-income families because they don't want to impose a small, small tax on the wealthiest people."

Coming out of the supercommittee's failure to produce a debt-reduction deal, President Obama and Democrats are expected in the coming days to push measures to extend a payroll tax cut and benefits for the unemployed.  Even if the measures fail, they could lay the groundwork for Democrats to argue that despite their best efforts, Republicans thwarted progress on economic recovery.

The two Senate leaders also traded barbs over whose party was at fault for the failure of the deficit-reduction panel. Kyl shot down a report that Grover Norquist and his anti-tax hike pledge tied Republicans' hands behind their backs on proposals for new revenues— including Kyl's.


"Grover was not happy with that, and we did it anyway," Kyl said of a Republican proposal which would have included additional revenues.

But Durbin said it was House Majority Leader Eric Cantor (R-Va.) who had walked out on a Democratic overture, arguing that Republican cries for Obama to take a higher-profile role in the deliberations were traps to pull Obama into a nasty fight with a lot of collateral damage.

"This was a congressional undertaking, and the Republicans made it clear if President Obama weighed in, it would become another presidential issue," Durbin said.