Senate Rejects, for Now, Extending Payroll Tax Cut

WASHINGTON (AP) — The Senate has blocked a Democratic plan to tax the rich to pay for President Barack Obama's plan to renew — and make more generous — a payroll tax cut due to expire at the end of the month.

Republicans and a handful of Democrats teamed up to block the plan Thursday. Democrats were poised to quickly kill a Republican proposal to renew the existing 2 percentage point payroll tax holiday and pay for it with cuts to the federal workforce.

The moves are the opening steps in end-of-session maneuvering over renewing the payroll tax cut, the centerpiece of Obama's jobs plan.

Republicans have signaled they'll permit passage of at least an extension of the current tax holiday, but the two sides haven't begun negotiating over how to finance it.