House GOP rejects 2-month payroll tax cut

DAVID ESPO

AP Spe­cial Correspondent

WASHINGTON (AP) — Con­gress lurched toward Grinch-like grid­lock on Tues­day as the Republican-controlled House rejected a two-month exten­sion of Social Secu­rity tax cuts that Pres­i­dent Barack Obama said was “the only viable way” to pre­vent a drop in take-home pay for 160 mil­lion work­ers on Jan. 1.

“The clock is tick­ing, time is run­ning out,” Obama said shortly after House voted 229–193 to request nego­ti­a­tions with the Sen­ate on renew­ing the pay­roll tax cuts for a year.

House Speaker John Boehner, told that Obama had sought his help, replied, “I need the pres­i­dent to help out.” His voice rose as he said it, and his words were cheered by dozens of Repub­li­cans law­mak­ers who have pushed him and the rest of the lead­er­ship to pur­sue a more con­fronta­tional strat­egy with Democ­rats and the White House in an already con­tentious year of divided government.

This time, it wasn’t a par­tial gov­ern­ment shut­down or even an unprece­dented Trea­sury default that was at stake, but the prospect that pay­roll taxes would rise and long-term unem­ploy­ment ben­e­fits end for mil­lions of job­less vic­tims of the worst reces­sion since the 1930s.

Yet another dead­line has been entan­gled in the dis­pute, this one affect­ing seniors, but the admin­is­tra­tion announced it had finessed a way around it. Offi­cials said paper­work for doc­tors who treat Medicare patients in the early days of the new year will not be processed until Jan. 18, giv­ing law­mak­ers more time to avert a 27 per­cent cut in fees threat­ened for Jan. 1.

What­ever the stakes, there was lit­tle indi­ca­tion that Repub­li­cans would get their wish for nego­ti­a­tions with the Sen­ate any time soon. Sen­ate Major­ity Leader Harry Reid, D-Nev., issued a state­ment say­ing he would be happy to resume talks on a year­long mea­sure — “but not before” the House rat­i­fies the two-month bill and sends it to Obama for his signature.

Given Obama’s remarks and Reid’s refusal to nego­ti­ate, it was unclear what lever­age Repub­li­cans had in the year-end stand­off. It appeared likely the par­ti­san dis­agree­ment could eas­ily per­sist past Christ­mas and into the last week of the year.

The stand­off was sow­ing con­fu­sion in busi­ness, run­ning out of days to adapt to any new pay­roll tax reg­i­men. Even the Senate’s pro­posed two-month exten­sion was cre­at­ing headaches because it con­tained a two-tiered sys­tem geared to ensur­ing that higher-income earn­ers paid a higher rate on some of their wages, accord­ing to a trade group.

“There’s not time enough to do that in an orderly fash­ion,” said Pete A. Isberg, pres­i­dent of the National Pay­roll Report­ing Con­sor­tium trade group. “We’re two weeks away from 2012.” He wrote a let­ter to con­gres­sional lead­ers this week warn­ing that the Sen­ate bill “could cre­ate sub­stan­tial prob­lems, con­fu­sion and costs.”

Democ­rats pounced on Repub­li­cans for reject­ing the Sen­ate bill, embold­ened by polls find­ing Obama’s approval ris­ing and that of the con­gres­sional Repub­li­cans fad­ing. They noted that sev­eral law­mak­ers whom Boehner appointed to nego­ti­ate a com­pro­mise had recently crit­i­cized an exten­sion of pay­roll tax cuts.

Democ­rats also intro­duced leg­is­la­tion in the House to rat­ify the two-month bill that passed the Senate.

Rep. Steny Hoyer, D-Md., the second-ranking House Demo­c­rat, asked Major­ity Leader Eric Can­tor, R-Va., if he was “pre­pared to bring that bill to the floor” if no com­pro­mise was in sight by year’s end.

Can­ter dodged the ques­tion, respond­ing that if Democ­rats wanted to do their part, they could appoint negotiators.

They didn’t.

For his part, Boehner sent a let­ter to the pres­i­dent, not­ing he had requested a year­long exten­sion of the tax cut and the House had approved one. “There are still 11 days before the end of the year, and with so many Amer­i­cans strug­gling, there is no rea­son they should be wasted,” he wrote, ask­ing Obama to call the Sen­ate back from its year-end vacation.

In his appear­ance before White House reporters, Obama said Repub­li­cans would be to blame for the con­se­quences of a stand­off. “Right now, the recov­ery is frag­ile, but it is mov­ing in the right direc­tion,” he said. “Our fail­ure to do this could have effects not just on fam­i­lies but on the econ­omy as a whole.” Obama requested the exten­sion of the pay­roll tax and unem­ploy­ment ben­e­fits in the fall as part of his jobs program.

As recently as Fri­day, it appeared a com­pro­mise was in sight on the legislation.

After efforts to agree on a year­long exten­sion sput­tered, Sen­ate Repub­li­cans and Democ­rats agreed on the two-month renewal, with the bill’s esti­mated $35 bil­lion cost to be cov­ered by an increased fee on mort­gages backed by Fan­nie Mae and Fred­die Mac. That assured deficits wouldn’t rise, a key Repub­li­can objective.

Repub­li­cans also pre­vailed on their demand to require Obama to decide within 60 days the fate of a pro­posed Canada-to-Texas oil pipeline that promises thou­sands of con­struc­tion jobs. The president’s polit­i­cal sup­port­ers are divided on the Key­stone XL project, with envi­ron­men­tal­ists gen­er­ally oppos­ing it and blue col­lar unions in favor, and Obama had hoped to avoid mak­ing a deci­sion until after the 2012 elections.

The mea­sure quickly cleared the Sen­ate on a vote of 89–10, with 39 of 46 Repub­li­cans in favor. Sen. Mitch McConnell of Ken­tucky, the GOP leader, said he was opti­mistic the House would go along.

Not so.

On a tele­phone con­fer­ence call on Sat­ur­day, numer­ous GOP law­mak­ers told Boehner and the lead­er­ship they opposed the Senate-passed measure.

While House Repub­li­cans quickly devel­oped their plan — reject the Sen­ate bill and seek nego­ti­a­tions on a com­pro­mise — there were under­cur­rents of dissent.

One Repub­li­can, Rep. Tom Cole of Okla­homa, told fel­low law­mak­ers at a closed-door meet­ing Mon­day night that he had been inac­cu­rately quoted in an email from an uniden­ti­fied GOP aide that described the con­tents of a pri­vate con­fer­ence call, mak­ing it appear that the lead­er­ship itself was divided. Two law­mak­ers said details from the email found their way into print quickly after the con­fer­ence call.

“It implied the speaker (Boehner) was in one place and the rest of lead­er­ship in another,” Cole said in an inter­view Tues­day. “That wasn’t the conversation.”

Other Repub­li­cans said Boehner bris­tled in Mon­day night’s meet­ing when asked whether he had given his bless­ing to the 60-day Sen­ate com­pro­mise, reply­ing that he had not and chal­leng­ing one ques­tioner to get his facts cor­rect. They spoke on con­di­tion of anonymity, not­ing the events had occurred behind closed doors.

At the end of their first year in office, there was no doubt about the abil­ity of dozens of first-term Repub­li­cans to flex their muscle.

As late as Mon­day night, sev­eral offi­cials said, Can­tor out­lined a plan for the House to vote down the Sen­ate bill, then vote sep­a­rately to seek nego­ti­a­tions with the Senate.

Sev­eral Repub­li­cans objected, not­ing that would allow House Democ­rats an oppor­tu­nity to go on record in favor of a pay­roll tax cut exten­sion. The plan was changed, and in pro­ceed­ings dur­ing the day, there was no oppor­tu­nity for a straight­for­ward yes-or-no vote on the Senate-passed bill that Democ­rats and the White House favor.

Posted by AP News on Dec 20 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.