Following the President's populist State of the Union address, which in turn built upon his landmark inequality speech in Osawatomie, Kansas, in December, his new budget seeks to preserve existing stimulus measures, such as the extension of payroll-tax cuts and unemployment benefits.
But the two sides could not agree to include extensions of payroll tax cuts or unemployment benefits, both scheduled to expire at the end of the year.
The deal approved by the House of Representatives late Tuesday to avert the so-called "fiscal cliff" did not include an extension of the payroll tax holiday, effectively hiking by 2percentt workers' payroll tax contributions which help pay for Social Security.
At a minimum, the Senate, which has until Dec. 31 to act on the payroll tax before it reverts to a higher level, will seek a two-month stopgap extension of the payroll tax holiday, unemployment insurance and Medicare payment rates for doctors, at a cost of an estimated $40 billion.
Early last year, they surrendered an extension of the payroll tax cut with barely a fight.
In late December, Congress passed a two-month extension of the payroll tax cut.
One such measure that he probably shouldn't embrace is an extension of the payroll tax cut legislated in late 2010.
Winning a full-year extension of the payroll tax, Mr. Earnest said, will still be a top priority.
The so-called conference committee was formed at the end of last year to come up with a 10-month extension of the payroll tax cut and unemployment benefits.
