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Geithner: Payroll-tax cut must be temporary

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Treasury Secretary Timothy F. Geithner warned Congress against extending the current payroll-tax holiday beyond 2012.

“This has to be a temporary tax cut. I don’t see any reason to consider supporting its extension” next year, said Mr. Geithner on Thursday at a Senate Budget Committee hearing.

But Mr. Geithner said he supports a pending bipartisan deal struck this week in Congress to continue the expiring payroll-tax cut and unemployment benefits through the end of the year, saying they are “critically important” to helping shore up a still wobbly economy.

The secretary urged lawmakers to continue to “build on this bipartisan moment of cooperation on something good for growth.”

Congressional negotiators said late Wednesday night they had reached a deal to extend the current 2-percentage point Social Security tax cut, set to expire at the end of February, for another 10 months. The tax break allows a worker earning $50,000 to keep about an extra $20 a week.

The compromise also would extend unemployment benefits for the long-term jobless and payments to doctors who treat Medicare patients.

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