“The sooner we put this useless partisan charade behind us, the sooner we can negotiate a solution that protects middle-class workers,” Reid (D-Nev.) said.
But Senate Minority Leader Mitch McConnell (R-Ky.) objected, arguing that in a divided Congress, the tax fight must be worked out by Reid and House Speaker John A. Boehner (R-Ohio). The Senate, McConnell said, should first take up a massive spending bill that will outline funding priorities for much of the government through September 2012 and ensure that federal agencies don’t close down this week. A temporary bill keeping the lights on expires Friday.
“First things first: Let’s keep the government from shutting down,” McConnell said. “If the majority leader is correct that the House bill won’t pass the Senate, why won’t he talk to the speaker and work out something that can pass on a bipartisan basis?”
In an especially bitter exchange at the start of the day’s session, Reid and McConnell traded blame for the stalemate over the issue that is preventing Congress from finishing its work and adjourning for the holidays.
Reid accused Republicans of living in “a world of non-reality” and said it was clear that “my friends on the other side of the aisle obviously want to have the government shut down.”
McConnell countered that Democrats were blocking a bipartisan agreement on the spending bill as leverage on the payroll tax issue and said Democrats have been dealing with “one point-scoring bill after another, designed.”
“Time is wasting,” he said.
The Senate fight took place a day after the House passed a version of a payroll tax cut extension despite a veto threat from the White House.
Approved 234 to 193, the Republican measure would extend a one-year break in the payroll tax that is due to expire at the end of the month, setting the rate at 4.2 percent for the year instead of allowing it to revert to 6.2 percent. But tied to the measure is a provision to speed up construction of an oil pipeline from Canada to the Gulf Coast that the White House is determined to slow down.
The bill’s passage was a victory for Boehner, who muscled it through the chamber largely on Republican votes, drawing support from conservatives wary of the tax cut by loading the bill with other GOP-favored items.
To fund the payroll tax cut, the measure would freeze pay for civilian federal workers for another year and reduce the government workforce. It would extend benefits for the long-term unemployed but reform the unemployment insurance program to reduce the maximum time that the unemployed can receive assistance, from 99 weeks to 59 weeks. It also would allow states to require drug testing for benefits.
The measure would postpone scheduled cuts in Medicare reimbursement rates for doctors but pay for the “doc fix” by raising Medicare premiums for upper-
income seniors and eliminating some funding for the federal health-care law.
Boehner suggested Tuesday that it was now up to the Senate to act or let the tax cut expire.
“The American people are asking, ‘Where are the jobs?’ ” Boehner said. “The House is listening, and we’ve passed a large bill that contains many of the priorities of our caucus and the White House.”
Ten Democrats voted to approve the House measure; 14 Republicans opposed it.
On Tuesday, Reid called the bill a “pointless partisan exercise” and an ideological grab bag of Republican pet projects.
President Obama has rejected linking a payroll tax extension to the approval of the 1,700-mile Keystone XL pipeline, and the State Department, which is examining the environmental impact of the cross-border project, announced Monday that it would not be able to complete the proper reviews in 60 days, as required by the House bill.
But a veto threat from the White House on Tuesday did not mention the pipeline. Instead, it accused Republicans of cutting programs needed by middle-income workers to fund the tax reduction.
To pay for extending the cut, Democrats have pushed for a surtax on those making more than $1 million a year. Although the Senate has twice blocked bills that would fund the reduction with a millionaire tax, Reid said again Tuesday that the wealthy should be asked to fund the tax cut for middle-class workers. He also said Democrats would be willing to extend the tax cut without outlining a way to pay for it.
In the meantime, lawmakers tapped to negotiate a compromise on the government spending measure did not advance a deal Tuesday.
Republicans insist that Democrats on the Appropriations Committee had signed off on a tentative agreement to provide government funding for nearly a year — and spare Congress another embarrassing budgetary conflict.
Boehner said the bipartisan group had “smiled at each other” and “shook hands” on a deal. But he said that Reid and Obama, aiming to gain sway on the payroll tax issue, instructed the lawmakers who brokered the pact to withhold their final signatures from a report that would send the deal for a vote.
Boehner accused Democrats of trying to leverage political concessions by holding the functions of government hostage.
McConnell echoed that Tuesday. “That’s what’s happening in Washington this week,” he said, “and the American people need to know about it.”
Democrats fear that once the House passes the spending measure, it could adjourn for the holidays, forcing the Senate to either accept the lower chamber’s version of the payroll tax bill or allow the tax cut to expire.
Democrats acknowledged that lawmakers were close to a deal after months of tough talks, but they denied that the two sides had reached a final agreement.
“We know for a fact that there are very important issues that remain to be resolved,” White House press secretary Jay Carney said.
Democrats said those issues include whether to bar the District from spending tax money on abortions for low-income women. Also at issue are whether to include language to reverse a decision by Obama to make it easier for Americans to visit relatives in Cuba and whether to include a provision to block new standards for incandescent light bulbs.
Democrats widely acknowledged that they now think that the two measures should be linked: For them to make final concessions on the spending bill, they said, Republicans should make compromises on the payroll tax issue. The spending measure, they said, was an insurance policy against Republicans leaving without settling the tax issue.
If the spending issue is not resolved by Friday, lawmakers raised the possibility for the first time Tuesday that they might have to adopt a short-term continuing resolution measure this week that would keep the government open while they battle into next week.
Congressional leaders had hoped to adjourn for the year Friday, but gridlock could force lawmakers to remain in Washington into next week.
On the payroll tax bill, Republicans still hope to persuade Senate Democrats to cross party lines .
Sen. Mary Landrieu (D-La.), who supports expanding oil production, said Tuesday that she has not decided how to vote on the House tax bill.
“I support the pipeline,” she said. “But I also respect the president’s views that he does not want to be pushed into a decision.”
But Reid called a vote on the House measure an “exercise in futility.” To clear the 60-vote hurdle for consideration in the Senate, there would need to be a bipartisan compromise.
“The only way you’re going to get something done over there is get some Democratic votes,” Reid said. “The only way I can get anything done over here is get some Republican votes. That seems to scream for compromise, and I believe that’s what we need to do.”
Staff writers Paul Kane and David Nakamura contributed to this report.