Tax Cut Talks Focus on Budget Cuts, New Fees

WASHINGTON (AP) – Familiar arguments could again echo through the halls of Congress as lawmakers return from a three week holiday break to consider extending a tax cut with one eye on the November election. There are opposing ideas for extending an average $20-a-week Social Security payroll tax cut through the end of 2012 without adding to the government’s long-term debt. Republicans would cut federal employee benefits. President Barack Obama would raise fees for airline passengers and eliminate Saturday mail delivery. Democrats in Congress would charge employers higher premiums for federal pension guarantees. The argument from Democrats for taxing the wealthy may still be useful as campaign fodder, but not so much in a practical sense. Health care remains part of the equation. Negotiators are trying to find $39 billion in cuts elsewhere to prevent a 27 percent cut in Medicare payments to doctors under an outdated 1997 formula.

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