Obama to Boehner: Two-month tax cut only option

House Speaker John Boehner of Ohio walks off the floor of the House cham­ber on Tues­day, Dec. 20, 2011, in Wash­ing­ton. The House rejected leg­is­la­tion to extend a pay­roll tax cut and job­less ben­e­fits for two months, draw­ing a swift rebuke from Pres­i­dent Barack Obama that Repub­li­cans were threat­en­ing higher taxes on 160 mil­lion work­ers on Jan. 1. (AP Photo/Evan Vucci)

BEN FELLER

AP White House Correspondent

WASHINGTON (AP) — Careen­ing toward a polit­i­cally toxic tax hike, Pres­i­dent Barack Obama implored House Speaker John Boehner on Wednes­day to get behind a two-month stop­gap until a longer deal could be struck early next year, call­ing it the only real way out of a mess that is threat­en­ing the pay­checks of 160 mil­lion work­ers and iso­lat­ing House Republicans.

In a weary Wash­ing­ton, the out­reach accom­plished lit­tle. All sides seemed to end the day where they began, with heavy polit­i­cal and eco­nomic con­se­quences at stake.

Boehner remained insis­tent on a full-year exten­sion of the exist­ing pay­roll tax cut before Jan. 1, urg­ing Obama to haul Sen­ate Democ­rats back to town to talk to his cho­sen nego­tia­tors. “Let’s get this done today,” Boehner told Obama, accord­ing to a speaker’s aide, who required anonymity to char­ac­ter­ize a pri­vate conversation.

But the Capi­tol was emp­ty­ing out fast, and the Sen­ate showed no incli­na­tion to return, hav­ing already passed a bipar­ti­san two-month tax cut it thought had set­tled the matter.

For tax­pay­ers, and for an econ­omy start­ing to show some life again, the stand­off was all hol­i­day gloom.

Bar­ring any action by Con­gress, Social Secu­rity pay­roll taxes will go up almost $20 a week for a worker mak­ing a $50,000 salary — that’s $40 less for a typ­i­cal pay­check or $1,000 over the whole year. Almost 2 mil­lion peo­ple would lose unem­ploy­ment ben­e­fits as well.

The polit­i­cal risks seemed only to deepen, too, par­tic­u­larly for House Repub­li­cans. They appeared poised to take the biggest blame for a tax increase even while push­ing for a deeper one.

The reli­ably con­ser­v­a­tive edi­to­r­ial page of The Wall Street Jour­nal blasted both Boehner and Sen. Mitch McConnell, the GOP leader, for how they han­dled the mat­ter. “The GOP lead­ers have some­how man­aged the remark­able feat of being blamed for oppos­ing a one-year exten­sion of a tax hol­i­day that they are surely going to pass,” the paper’s edi­to­r­ial said.

In a year of leg­isla­tive brinks­man­ship remark­able even by Wash­ing­ton stan­dards, the lat­est fight spilled into the lap of Repub­li­can can­di­dates run­ning for president.

For­mer House Speaker Newt Gin­grich chas­tised Con­gress, par­tic­u­larly the Sen­ate, for fail­ing to extend the 2 per­cent­age point tax cut for a full year.

“They can’t fig­ure out how to pass a one-year exten­sion, so the Sen­ate leaves town?” Gin­grich remarked while cam­paign­ing in Iowa. “It’s an absurd dere­lic­tion of duty.”

Rival Mitt Rom­ney refused to take a posi­tion, again steer­ing clear of Washington’s hot pol­icy debate.

“I’m not going to get into the back-and-forth on the con­gres­sional sausage-making process,” the for­mer Mass­a­chu­setts gov­er­nor told reporters after events in New Hamp­shire. “I hope they’re able to sit down and work out a solu­tion that works for the Amer­i­can people.”

But the White House made clear the time for talks were over for this year.

“The nego­ti­at­ing has hap­pened already,” pres­i­den­tial spokesman Jay Car­ney said, refer­ring to the Sen­ate bill the White House insists was sealed with Boehner’s blessing.

Boehner dis­putes that he ever gave a nod of sup­port to the two-month tax cut that many in his cau­cus oppose.

He and other House mem­bers call it a poor and unwork­able tax policy.

Obama also called the Senate’s Demo­c­ra­tic leader, Harry Reid, and praised him for the bipar­ti­san tax-cut bill with McConnell that passed the Senate.

Obama did most of the talk­ing in his 10-minute call to Boehner.

The pres­i­dent made clear to Boehner that this was essen­tially his last leg­isla­tive chance: There was no other option under con­sid­er­a­tion except the two-month tax bill, no sur­prise last-minute deal, and no real chance that Reid was call­ing the Sen­ate back, accord­ing an admin­is­tra­tion offi­cial who spoke anony­mously to describe the pri­vate phone call.

From Boehner’s per­spec­tive, the only real progress was that Obama had shown engage­ment with the speaker that he had not in weeks, accord­ing to an aide who also spoke anony­mously to describe inter­nal thinking.

Obama for months has called for a year-long exten­sion of the tax cut; he would pre­fer that it be deep­ened, too, although that idea never went any­where in Con­gress. Obama reit­er­ated to Boehner that he wants to work out a full-year deal with Con­gress but there is no time for that to be done right now.

Over­all, the stale­mate has cen­tered on how to pay for another year’s tax cut with­out adding to the deficit. That is the debate ahead — if the two-month deal gets done first.

Boehner’s reac­tion gave no hints of a break­through, even though House Repub­li­cans appear increas­ingly iso­lated. They’re not get­ting sup­port from Sen­ate Repub­li­cans and are bat­tling against a pres­i­dent whose approval num­bers, while not impres­sive, are bet­ter than theirs.

Obama was to have left Wash­ing­ton by now for a Christ­mas vaca­tion in Hawaii, where his wife and two daugh­ters have been since the weekend.

Instead, after speak­ing to Boehner and Reid, he found a dif­fer­ent escape from the White House.

He took his dog, Bo, and went hol­i­day shopping.

Posted by AP News on Dec 21 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.