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Administration Official Dances Around Payroll Tax Cut Issue Administration Official Dances Around Payroll Tax Cut Issue

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Influence

Administration Official Dances Around Payroll Tax Cut Issue

Jan Eberly, the Treasury Department's assistant secretary for economic policy, ducked an opportunity to press for an extension of the payroll tax holiday Friday, in a move that seemed to signal the administration's lack of desire to expend precious political capital on the issue.

The payroll tax holiday had been expected to expire at year's end without much fanfare, but it has recently come back to life as an issue with some Democrats calling for its extension including Lawrence Summers, Obama's former National Economic Council director, and Rep. Chris Van Hollen, D-Md., the ranking member on the House Budget Committee, who has said it "needs to be part of the conversation."

On the other side of the debate AARP, a major lobbying force representing older Americans, has flexed its muscle, arguing it is time for the tax holiday should expire because payroll taxes fund Social Security which provide retirement and disability income for millions of families.

Eberly seemed intent on trying to keep the administration from getting caught in the middle, but declining to fight for something can be akin to taking a side.

When asked if the administration is calling on Congress to include an extension of the payroll tax holiday, unemployment insurance, or an increase in the debt ceiling in the effort to avoid the fiscal cliff at the end of the year, Eberly was noncommittal, choosing to focus on other proposals.

"The payroll tax is certainly among those that would be considered, but we have proposals that have already been put forward to support the economy in the near term, including expanding access to refinancing, which provides additional spending power for households and provides them access to the historically low interest rates that currently prevail in the housing market," she said a press conference Friday on the latest jobs report.

Eberly avoided wading into specifics and stressed the importance that Congress sends President Obama a bill to continue middle class tax cuts, saying it would be a critical component to heading off the fiscal cliff looming at the end of the year.

"The administration has put forward a number of proposals some of which are part of the fiscal cliff and would address pieces of that, particularly the middle class tax cut," she said. "The president has said that he would sign that immediately if it were put before him. The Senate has passed it and clearly we have called on the House to complete the work on putting that in front of the president."

She also chose to focus on investments in education -- an issue that Obama has talked about as a major priority in his reelection campaign.

"Additionally I emphasize the decline in education employment," she said. "It's been among our consistent proposals to support the hiring of teachers through components of the American Jobs Act that we support and would like to see Congress move forward on."

Eberly gave no response on the debt ceiling, which Treasury recently confirmed is expected to be reached at the end of the year and would need to be raised in time to prevent default on U.S. debt by the time it exhausts "extraordinary measures" early next year.

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