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Obama Administration Considering Temporary Cut in Payroll Tax for Businesses


Posted on 10 Jun 2011

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As advisers discuss with President Barack Obama more ways to boost the economy, one of the considerations on the table is a temporary cut in payroll taxes that employers pay on wages.

A deal between Obama and congressional Republicans in December included a reduction in taxes that workers have taken out of their paychecks in 2011, but corporations did not get the same break.

The official, who spoke on condition of anonymity to Reuters, declined to give details about other ideas the administration is considering.

The struggling U.S. economy is the biggest challenge that threatens Obama's hopes of being re-elected president in 2012.

The president, at a news conference with German Chancellor Angela Merkel earlier this week, said his administration was looking at ways to extend elements of the December deal.

"Some of the steps that we took during the lame duck session — the payroll tax, the extension of unemployment insurance, ... the tax breaks for business investment in plants and equipment — all those things have helped," he said.

"And one of the things that I'm going to be interested in exploring with the members of both parties in Congress is how do we continue some of these policies to make sure that we get this recovery up and running in a robust way."