Payroll tax cut extension: Senate Republicans say they’ll back it “in all likelihood”

Senate Republicans have indicated for the first time that a majority of them would support an extension of the payroll tax cut, part of President Barack Obama's $447 billion job creation package.

"In all likelihood we will agree to continue the current payroll tax relief for another year," Senate Republican leader Mitch McConnell said Tuesday, Reuters reported.

According to Reuters:

The move by Republicans could help avert an end-of-year battle with Democrats after months of bitter budget battles that brought the country to the edge of default in August and cost it its coveted AAA rating from Standard & Poor's.

Last week, President Obama challenged Congress to get behind his payroll tax extension before the tax cut expired on Dec. 31. "If Congress refuses to act, then middle-class families are going to get hit with a tax increase at the worst possible time," Obama said in Manchester, N.H., the Miami Herald reported. "The question they'll have to answer when they get back from Thanksgiving is this: Are they really willing to break their oath to never raise taxes, and raise taxes on the middle class just to play politics?"

"The Democrats put [Republicans] in a box," Andrew Taylor, a North Carolina State University political science professor, told Reuters. "I think many Republicans realized this is a bad side of the argument to be on."

Democrats are promoting a bill that would not only extend last year’s 2 percent payroll tax cut, but lower current payroll taxes even further, from 4.2 percent to 3.1 percent, CNN reported. They say that will put up to $1,500 more into middle class pockets next year.

Democrats are organizing a Senate vote later this week on their extension plan and their proposed way of paying for it – a 3.25 percent surcharge on annual income over $1 million – Reuters reported.

McConnell said the GOP would offer its own bill this week that would extend the payroll tax cut for one year but offset its costs in another way, CNN reported.