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Tax Cuts: Battle Begins Over Just How to Pay For Them
The Associated Press | January 15, 2012 | 01:31 PM EST

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.

As Congress returns from a three-week holiday break, those are a few of the ideas for how to pay 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.

Obama and fellow Democrats insisted on taxing the wealthy to offset the deficit impact of the payroll tax cut and of providing jobless benefits to the long-term unemployed.

While still useful as campaign fodder, that idea is largely a bygone one.

House and Senate negotiators are drawing on Obama's budget and the work of the defunct congressional supercommittee on deficit reduction to come up with the $160 billion or so needed to continue the tax cut and federal jobless benefits. Both of are set to expire Feb. 29.

Republicans controlling the House took a political drubbing in a December battle that produced a two-month extension of unemployment aid and the 2 percentage point tax cut for 160 million workers.

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