The Senate voted this week on payroll tax plans by both the Democratic and Republican members. The Democratic plan introduced by Sen. Robert Casey Jr., (D-PA) was modified. The new plan proposes a reduction in the 2012 Social Security payroll taxes from 6.2% to 3.1%. It does not include a reduction for employers and the surtax on incomes over $1 million is reduced to 1.9%. The plan also proposes increased fees on mortgage lenders who work with Fannie Mae and Freddie Mac. The Democratic proposal accepted the Republican suggestion to limit unemployment benefits for those with incomes over $1 million.

The Republican plan is the Temporary Tax Holiday and Government Reduction Act. It proposes a reduction in Social Security payroll taxes from 6.2% to 4.2% for employees in 2012. The plan is paid for by a 10% reduction in the federal work force through attrition, by freezing salaries next year for Congress and federal workers and by limiting unemployment benefits for those with $1 million in income.

On Thursday the Republican leadership of the House published their proposed plan. It includes the 2% reduced payment for employees. The Republicans propose paying for the plan with a freeze on salaries of Congress and federal workers. In addition, parents would need to include a Social Security number to claim the child tax credit.

The White House continued to press leaders in Congress to pass a bill. President Obama stated, "I expect that it's going to get done before Congress leaves. Otherwise, Congress may not be leaving, and we can all spend Christmas here together."

Editor's Note: While the debate over payment continues, it now seems likely that a compromise plan with a 2% reduction and some method of offsets through other types of savings will be passed this month.