Payroll Tax Cut Plan Will Be Unveiled Monday, Democratic Senator Says

WASHINGTON -- Sen. Kent Conrad (D-N.D.) said Sunday that Senate Majority Leader Harry Reid (D-Nev.) will offer a new plan to extend the payroll tax breaks on Monday, after a previous bill to extend the tax cuts failed in the Senate last week.

"We understand it is going to take a change," Conrad said. "Majority Leader Harry Reid called me yesterday and said he will propose tomorrow a compromise plan to extend the payroll tax cut."

He declined to give details on how the bill will be paid for, although he said "it will be paid for in a way that's credible and serious." But Conrad emphasized that failing to extend the tax breaks, which save working class households about $1,000 per year, would be a mistake.

"We should not have a tax increase on the middle class," Conrad said. "That just makes no sense in this economy."

Republicans largely opposed the previous bill to extend the tax breaks, saying the bill would not strengthen the economy unless it was paid for by cuts from other areas. President Barack Obama urged voters Saturday to contact their representatives and say they want the tax cuts extended.

White House adviser David Axelrod criticized Republicans Sunday on NBC's "Meet the Press" for opposing the extension.

"It's unfathomable to me why they want to raise taxes on 160 million Americans," Axelrod said, adding later, "That is not a prescription for rebuilding middle class security."

Sen. Tom Coburn (R-Okla.), also appearing on "Fox News Sunday," said Democrats were "playing a political gotcha game" with the tax cuts, particularly because a tax bill cannot originate in the Senate.

"The principle that you would in fact create a tax cut, and then say you're going to pay for it over the next 10 years is exactly why we're bankrupt as a nation," Coburn said. "Whether or not we continue a reduction in the amount of taxes that come to Social Security is one thing, paying for it -- we have so much waste in Washington, to take 10 years to pay for it is ridiculous."

Still, he acknowledged that the payroll tax cut and unemployment benefits will likely be extended. But Coburn said the bills should be paid for "by decreasing spending now in other low-priority areas."

"The question the American people should ask is, 'Where is the backbone in Washington to actually pay for these extensions in the year in which the money is spent?'" he said.