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The Daily Tar Heel

WASHINGTON, D.C. (MCT) — Hesitant to be seen as holding up a payroll tax break for American workers, House GOP leaders will put forward a new proposal to extend the tax cut — giving up, for now, on the GOP-led requirement that it must be paid for, as talks on a compromise with Democrats have stalled.

House Speaker John A. Boehner, R-Ohio, and other leaders said their backup plan could come for a vote as soon as this week, as Congress struggles to find common ground before the tax break expires Feb. 29. Keeping the tax holiday is President Obama’s top legislative priority.

“This is not our first choice,” said Boehner and his leadership team, including Majority Leader Eric Cantor, R-Va., in a joint statement.

Republicans are seeking to shift the debate on the tax break for 160 million working Americans. Last year’s showdown left them badly battered in the polls as they insisted the tax break be paid for with cuts elsewhere in the budget — and some Republicans said the tax cut was not a worthwhile benefit.

The new GOP proposal would allow the tax break to continue without having yet resolved the tough decisions over how to pay for the $160 billion package — a decision that could rile fiscal conservatives within Boehner’s right flank who insist on keeping deficits low. Negotiations under the GOP proposal would continue.

Democrats welcomed the overture as a “major breakthrough.”
The benefit trims by 2 percentage points the tax the workers pay into Social Security, providing about $20 a week in the pockets of average workers that economists say is helping to stimulate the economy. The retirement fund would be replenished by the cuts to other programs.

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