President Obama urged Congress to take action now to extend the one-year payroll tax cut for workers through the end of 2012. “There are a lot of middle-class families who sure could use the security of knowing that the tax cut that I signed in December to help boost the economy and put a thousand dollars in the pockets of American families, that that’s still going to be around next year,” Obama said in Rose Garden statement on July 8.
The president, in remarks that focused largely on the economy and deficit talks, singled out the payroll tax cut along with patent reform legislation and pending free trade agreements as measures that have bipartisan support and that Congress could pass immediately. A payroll tax cut also could be part of a deficit-reduction agreement that the president and congressional leaders hope to reach in time to avoid a U.S. government default on August 2, noted White House Press Secretary Jay Carney.
“One of the reasons why we need to come together in a bipartisan way to do something significant on deficit reduction and dealing with our long-term debt issues,” Carney said, “is because we need to put our economy on a sounder footing in the 21st century so we can continue to grow and create jobs.” The president made his remarks in response to the latest report on unemployment rate, which rose to 9.2 percent.
“The unemployment rate remains unacceptably high and faster growth is needed to replace the jobs lost in the downturn,” noted Council of Economics Advisers Chairman Austan Goolsbee in a White House blog. “Today’s report underscores the need for bipartisan action to help the private sector and the economy grow,” he said.
Carney called the jobs report “disappointing” and said it is “a call to action” to those involved in the deficit talks, which were to resume on July 10 at Obama’s request. The White House spokesman advised reporters not to expect an agreement to be reached at the July 10 meeting, describing it instead as an opportunity for both sides to give a clearer picture of their “bottom lines” and determine whether a significant deal is possible.
House and Senate lawmakers have approved comprehensive patent reform bills that would prohibit the award of new tax strategy patents. The America Invents Bill (HR 1249), passed by the House on June 23 (TAXDAY, 2011/06/24, C.3), would also permit the U.S. Patent and Trademark Office to seek assistance from the Department of Treasury and the IRS to ensure that patents do not infringe on the ability of others to interpret the tax law and that implementing such interpretations remains in the public domain. A companion bill (Sen 23) passed the Senate in March (TAXDAY, 2011/03/09, C.1). Neither the House nor the Senate bill would apply to tax return-preparation software. The measures must be reconciled and a conference agreement must be voted on.
A few payroll tax bills have been introduced during the current session of Congress. Most recently, Sen. Robert P. Casey, Jr., D-Pa., introduced payroll tax legislation that would provide a temporary credit for certain employers. The bill, Sen 1330, was introduced on July 6 and is co-sponsored by Sen. Kirsten Gillibrand, D-N.Y.
By Paula Cruickshank and Stephen K. Cooper, CCH News Staff
White House Press Release: Statement by CEA Chairman Austan Goolsbee on the Employment Situation in June