(Host) Vermont’s Congressional delegation has split over a bill that extends the payroll tax cut for another 10 months.
Senator Patrick Leahy says the legislation isn’t perfect, but will provide important tax relief for many Vermonters.
But Senator Bernie Sanders and Congressman Peter Welch both say they have serious concerns about how the plan is financed.
VPR’s Bob Kinzel reports:
(Kinzel) The legislation does several things. It extends a payroll tax cut through the rest of the year, it reauthorizes long term unemployment benefits for states with high jobless rates and it delays a sharp reduction in fees for Medicare health care providers.
While the extension of unemployment benefits and the Medicare fees have specific funding sources, the plan that continues lower payroll tax rates does not.
Senator Leahy voted for the bill. In a written statement he said.
(Leahy) "While I do have concerns with certain parts of the bill… preventing an extension of the payroll tax cut now would essentially raise taxes on working families in Vermont."
(Kinzel) But Senator Sanders and Congressman Welch saw the issue differently. Both said they were concerned that the payroll tax cut would leave a $100 billion hole in the Social Security Trust Fund. Welch said that’s a trade off that he’s not willing to take.
(Welch) "We’ve essentially borrowed $100 billion to pay for a 10 month tax break on Social Security but that is coming directly out of the Social Security Trust Fund. So sure short term benefits for everybody – about $1,000 in ten months – but long term concern where this bond between contributions and benefits has been broken."
(Kinzel) Backers of the plan say maintaining the payroll tax cut will help stimulate the national economy. Welch says there are better ways to achieve this goal.
(Welch) "If we’re going to borrow money why not do it for roads for bridges for broadband for airports for rail? The things that are going to bring our infrastructure into the 21st century state and create jobs and long term benefits. My preference is that that’s way we’ve got to go emphasize investments not consumption."
(Kinzel) Both the House and the Senate voted in favor of the bill on Friday afternoon and President Obama is expected to sign the legislation into law in the next few days.
For VPR News, I’m Bob Kinzel in Montpelier.