Understanding Congress’ Payroll Tax Cut Fight

President Obama, House Democrats and majorities of both parties in the Senate want to immediately renew the tax cut and jobless benefits for the next two months, and find a way later to extend them through 2012. House Republicans want to do it for a full year right away.

That doesn’t sound like an unbridgeable gap. Yet the fight has evolved into a year-end partisan grudge match with no clear resolution in sight and with huge political and economic stakes.

Without action, the payroll tax paid by 160 million workers will rise by 2 percentage points to 6.2 percent on Jan. 1. That would mean $1,000 a year less in the pockets of people making $50,000, or about $19 weekly. In addition, 3 million people currently receiving long-term jobless benefits will begin to lose weekly payments that average under $300 — for many, their only support.-WASHINGTON-AP

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Payroll Tax Spat

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