House Approves Payroll Tax Cut Extension

Source: Tom Curry / MSNBC

By a vote of 293 to 132, the House passed a bill Friday to keep the Social Security payroll tax at its lower 4.2 percent rate and extend unemployment benefits.

The bill, which the Senate will vote on Friday afternoon, is the result of negotiations regarding how, or if, the extensions will be paid for.

The payroll tax cut alone would cost $94.5 billion.

A worker making $50,000 a year would pay $2,100 in Social Security taxes this year, instead of $3,100 if the tax were at its normal 6.2 percent level. The lost revenue for Social Security benefits would be replaced by drawing money out of general tax revenue, adding to the budget deficit.

The bill faces stiff opposition in the Senate from many Republicans and a few Democrats as well.

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