While the Senate debates President Obama's deal with Republican leaders to extend the Bush tax cuts for two years, one high ranking local conservative Republican is pushing back.
Congressman Scott Garrett (R-NJ5) says he supports the call to extend the Bush tax cuts, but he says the $170 billion price tag to extend unemployment benefits and cut the Social Security payroll tax may be over the top when the federal government needs to reduce spending.
"We need to make more changes to spending and we need to have more certainty so investors, business people, can decide they are going to know what the rules of the road are and invest in their companies and hire people," said Garrett. "We are not doing that now."
Garrett, who is expected to head the House's powerful subcommittee on markets, says economists he's listening to say the bipartisan tax-cutting deal won't stimulate the economy and will just increase the deficit. But White House and Congressional boosters say its just what the stalled economy needs.
Garrett says he's worried about the White House plan to grant a reduce the payroll tax that funds Social Security by two percent for a year.
"What will that do?" asks Garrett. "That will make Social Security even weaker going forward. So if you are a senior citizen I'd think you would have a lot concerns about the president's proposal right here."
Under current law 6.2 percent of the wages paid out to workers is deducted to help sustain Social Security. Under the White House and Republican leader deal for the year 2011, that would drop to 4.2 percent. So that means that a worker making $40,000 would get $800 in tax relief. A worker making $70,000 would pay $1,400 less.
The White House says the payroll tax cut will help the middle class and that the $112 billion dollar cost of the rollback will be offset by direct reimbursement into the Social Security Trust Fund from the federal government's general revenue.
Garrett would not say how he would vote on the deal because the bill is still in flux. But this fiscal conservative Constitutionalist has quite an independent worldview, opposing TARP even as his caucus leaders said a no-vote would lead to a credit crunch and double digit unemployment. "We got that anyway," quipped Garrett.