Democrats Considering Two-Month Extension of Payroll Tax Cut

Dec. 15 (Bloomberg) -- The U.S. Senate’s top Democrat said his colleagues are considering a two-month extension of an expiring payroll tax as well as unemployment benefits if they are unable to strike a deal on a longer-term plan with Republicans.

“We’ll only do that if what we’re working on doesn’t work out,” Senate Majority Leader Harry Reid told reporters tonight. “I always have a Plan B.”

He said, “I hope we don’t get there, but if we do, what the two-month would accomplish is make sure people continue to get the payroll tax holiday and also the unemployment benefits.”

The proposal would also postpone looming cuts in Medicare payments to doctors for two months, said Reid.

Lawmakers have been deadlocked over how to finance an extension in a cut in the Social Security payroll tax that is set to expire at the end of this month.

--Editors: Jim Rubin, Don Frederick.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net