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12.19.11

House Balks at Passing a Payroll Tax Cut Backed by President Obama

Just when Washington thought it had a deal, it falls apart. Patricia Murphy on why House Republicans are refusing to go along with the payroll-tax compromise.

Nothing in Washington is easy, it seems. Not even cutting people’s taxes.

A House vote to extend the payroll tax cut that President Obama said should be “a formality” next week is a formality no more, now that Speaker John Boehner has said that he and his Republican caucus will oppose the measure.

Boehner’s announcement sets up yet another stand-off between the House and Senate and caps a year in Congress dominated by bitter partisanship and near-total gridlock.

Boehner made it clear on Meet the Press that his members have no intention of supporting a temporary version of the tax cut passed by the Senate on Friday.  “It’s only for two months,” Boehner said.  “The president said we shouldn’t go on vacation until we get our work done and House Republicans agree.  Let’s do this for a year.”

That’s easier said than done.

The Senate bill, which passed 89-10, would have extended the current 4.2 percent payroll tax rate through the end of February while House and Senate work next year to hammer out a longer-term agreement.  The bill also would have temporarily extended benefits for long-term unemployed workers, delayed a 27.5 percent rate cut for doctors serving Medicare patients, and required an Obama administration decision within 60 days on a controversial oil pipeline that would to run from Canada to Port Arthur, Tex.

Because the Senate bill included the pipeline provision over the strong objection of most Democrats, House Republicans had been expected to take their victory and renew their fight over the payroll and unemployment issues again in early 2012.

But Boehner called the Senate’s time frame “two months of just kicking the can down the road” and echoed the anger he heard during a Saturday conference call with House Republicans, when rank-and-file members sounded off against the Senate bill, according to GOP aides.  House members complained that their chamber had given in too many times to the Senate already this year and said they wanted a final bill closer to the bill the House passed earlier this month.

That bill had a one-year extension of the payroll tax reduction and Medicare doctors’ rate fix, but paid for them with a freeze on federal salaries. The House measure also reduced the maximum length of unemployment benefits from 99 weeks to 59 weeks and increased health- care premiums on federal workers and high-income seniors.

In response to Boehner’s NBC appearance, Senate Majority Leader Harry Reid said Boehner had asked him and Senate Republican leader Mitch McConnell to come up with a compromise that both parties could live with—and that the Senate plan was that compromise.  “Instead of threatening middle-class families with a thousand-dollar tax hike, Speaker Boehner should bring up the bipartisan compromise that Senator McConnell and I negotiated,” Reid said.  “If [Boehner] refuses to vote on the bipartisan compromise, Republicans will be forcing a $1,000 tax increase on middle class families on January 1st.”

Boehner called the Senate compromise “two months of just kicking the can down the road.”

House Republican aides said Sunday that the House will either amend the Senate version of the bill and send it back to the Senate for another vote or move to a conference committee between the two chambers, both of which could take days or weeks to negotiate.  The payroll tax rate will return to 6.2 percent on Jan. 1 if the House and Senate cannot agree on a fix.

On Friday, President Obama called it “inexcusable” for Congress not to extend the tax cut and added that even the short-term fix should be “done with as little drama as possible”—a directive that obviously fell on deaf ears.