The administration forcefully pushed back Saturday against reports that it is considering a new tax cut to replace the payroll tax cut, reports the Hill. The Washington Post was first to claim the White House is looking into alternatives to the payroll tax cut that expires at the end of the year that could help boost the sluggish economy. The payroll tax cut is seen as an effective form of stimulus because it shows up in every paycheck but some are pushing for an alternative since that tax ordinarily funds Social Security. Shortly after the Post story went up, the Wall Street Journal also reported the White House is considering whether to propose a new middle-class tax cut to replace the payroll tax cut.
Yet the White House didn’t mince words when pushing back against the claims Saturday. "The report is not correct,” Josh Earnest, the White House’s deputy press secretary, told reporters. “The administration is not contemplating at this time a tax cut as the way that it's described in the Post.” Earnest, however, did say the administration is committed to keeping taxes low as the economy continues to struggle.
The Post cited sources close to the administration to report that the new tax cut “may be similar” to the cut Americans received in 2009 and 2010. Regardless of what the administration itself may want, any new tax cut would have to be approved by Congress after the election. The Wall Street Journal is more cautious, saying the idea of a new tax cut is part of a broad discussion over how to tackle the expiring tax breaks and spending cuts that are scheduled to take effect in 2013.
“The Obama administration hasn't settled on any specific plan and could decide to back away from the idea of new tax breaks,” notes the Journal.