As the end of the year approaches, Congress must make decisions about two unrelated financial matters of key importance to Americans: whether to extend payroll tax cuts and unemployment benefits. One issue affects working Americans; the other impacts the unemployed.

Given the country's brighter, but still precarious, economic outlook, both of these measures warrant extensions. Come January, non-wealthy working Americans can't afford to be socked with a tax increase. That's what will happen if Congress doesn't extend the payroll tax cuts for another year.

Unfortunately, what should be no-brainer legislation has turned into a political fistfight along partisan lines, with Democrats supporting the plan and deficit-minded Republicans maligning proposals backed by President Obama.

A year ago, Congress voted to temporarily reduce employees' share of the Social Security payroll tax by 2 percentage points in order to stimulate the economy. The rate will go back to 6.2 percent unless Congress acts by the end of this month.

If that happens, taxes will increase $1,000 for families earning $50,000. Roughly 160 million middle-income Americans, including 3.1 million families in Minnesota, would feel the financial blow in their paychecks, according to the U.S. Treasury Department.

Fifty-eight percent of Americans want the cuts extended, according to a new Congressional Connection Poll released this week. But Republicans remain divided, despite the estimated $109 billion in tax relief the plan offered to working Americans this year.

The cuts are so critical to the president's jobs program that he made them a focal point. With new urgency this week, the president rightly urged Republicans to join with Democrats to back an extension.

"My message to the Congress is this: Keep your word to the American people and don't raise taxes on them right now," he said.

Unfortunately, the president's plan overreached, calling for even deeper payroll tax cuts, from 6.2 percent to 3.1 percent, which Democrats wanted to partially pay for with a short-term income surcharge on millionaires.

When put to a vote in the Senate, the plan received a 51-to-49 majority, but fell short of the 60-vote supermajority needed. Ideas for taxing the rich have been rejected repeatedly by deficit-minded Republicans, and this plan was no different.

Still, the close vote gives reason to hope that a compromise is in the offing. Republicans don't want to be demonized for raising taxes in an election year. Even so, they haven't offered a plan palatable to their own party, much less Democrats.

One GOP plan resoundingly defeated in the Senate called for paying for the tax cuts through a 10 percent cut to the federal workforce and continuation of a federal employee pay freeze. Even 26 Republicans refused to back that stinker.

House Speaker John Boehner says an extension bill is coming that will likely include provisions to delay the implementation of air pollution standards for industrial boilers, while making it possible to move ahead on developing the controversial Keystone XL oil pipeline.

This wrongheaded anti-environment approach should be flatly rejected. This year alone, House Republicans have put forth more than 170 bills attacking U.S. environmental regulations. It's outrageous that they would attempt to tie Americans' paychecks to this ideological war.

Extending unemployment benefits is also critical. The average payout is $295 a week, and the benefit generally lasts 26 weeks. More than half of the nearly 14 million unemployed Americans are either ineligible for the benefits or have used them up.

Without an extension, 2.2 million jobless Americans will lose benefits beginning in February. With unemployment figures still hovering at a steep 8.6 percent, their prospects for landing a job remain slim. That's why extending the benefits is critical.

After the nasty deficit battle in Congress earlier this year, Standard & Poor's downgraded the U.S. credit rating. That should have served as a warning. It's time that congressional leaders realize that political gridlock is hurting the economy and the middle class.

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