House Republicans intent on killing Senate payroll tax cut deal

December 19, 2011

House Republicans were gearing up to ditch a bipartisan Senate bill on Tuesday that would extend a federal payroll tax holiday for two months, charging that the deal represented the old ways of doing business that they were elected to change.

For the first time in a month of partisan sparring over the tax break, neither party appeared confident that the issue would be resolved, averting a January tax increase for 160 million American workers.

“We were elected for a reason,” freshman Rep. Renee L. Ellmers (R-N.C.) said after a Republican huddle in a Capitol basement meeting room Monday night. “That was because the American people were tired of business as usual.”

At the raucous, two-hour closed-door meeting, House Republicans compared themselves to the underdog, principled Scots in the movie “Braveheart” and, over takeout chicken sandwiches, promised to knock down the Senate bill.

Senate Democrats accused House Speaker John A. Boehner (R-Ohio) and his leadership team of walking away from the deal as a capitulation to tea-party elements and said they had no plans to reopen talks. They said that if the House rejects a deal that was adopted in the Senate on an 89 to 10 vote, it would amount to nixing the tax cut.

“It’s high-stakes poker,” said Rep. Thomas J. Rooney (R-Fla.) of the stalemate with the Senate, as he left the Republican meeting.

GOP leaders announced late Monday that they would hold key votes on the Senate package Tuesday instead of late Monday night, as had been planned.

But Boehner predicted the House would reject the Senate bill and seek to open negotiations over how to pay for a $120 billion, full-year extension of the tax cut.

“Our members do not want to just punt and do a two-month, short-term fix where we have to come back and do this again,” Boehner said Monday night.

GOP critics of the two-month deal said it would be a half­-measure that would not solve the larger problem of stimulating the economy. One House member who had been a businessman argued that “at minimum” it should have been a 90-day extension to match the quarterly schedule on which many corporations pay taxes.

“That’s logic, but again, what I’m learning down here is we don’t use logic,” said freshman Rep. James B. Renacci (R-Ohio).

President Obama has made extending the expiring one-year payroll tax holiday his year-end priority, arguing that letting workers keep and spend more of their paychecks would boost the still-sputtering economy.

If the tax holiday is not extended, payroll taxes will jump from 4.2 percent to 6.2 percent in January, costing the average family $1,000 next year. The Senate package also includes provisions that would extend jobless benefits for millions of unemployed Americans and avert a cut in reimbursement rates for doctors who treat Medicare patients.

Senate Majority Leader Harry M. Reid (D-Nev.) said he had no intention of restarting talks with the House. A two-month deal, he said, would provide time for the parties to work out a deal for the entire year.

“I will not reopen negotiations until the House follows through and passes this agreement that was negotiated by Republican leaders, and supported by 90 percent of the Senate,” said Reid.

House Minority Whip Steny H. Hoyer (D-Md.) called the eleventh-hour tumult “a partisan convulsion driven by the tea party.”

Democrats appeared confident that the chaotic developments would reinforce their argument that Obama’s efforts to improve the economy have been thwarted by Republicans in Congress.

There were fresh signs that Obama has gained ground on the tax issue, a traditional political sweet spot for Republicans. In a new Washington Post-ABC News Poll, voters said they trusted Obama to do a better “job handling taxes” than Republicans by a margin of 46 percent to 41 percent — a dramatic swing from two months ago, when voters favored the GOP, 46 percent to 39 percent.

House Republicans were equally confident that Americans would blame Democrats — who have spent weeks promising to work through the holidays to settle the issue — if they now shut down talks.

The House drama once again highlighted Boehner’s tenuous hold over his 242-member caucus, which includes dozens of freshmen elected on promises to remake Washington.

The speaker steered a year-long tax-cut measure through the House last week only by attaching to the package a series of other Republican priorities designed to lure conservatives who oppose another holiday for a tax that funds Social Security.

One of those provisions made it into the Senate deal, a requirement that the Obama administration make a quick decision on the controversial Keystone XL oil pipeline.

But that did not mollify House members. At a news conference Monday, 10 Republican freshmen joined in rejecting the Senate action as the kind of Washington dealmaking that makes the public hate Congress.

Boehner denied Monday that he ever signed off on the Senate deal. He also said he never suggested to fellow House members in a Saturday phone call that he was inclined to take the deal, as some Republicans have indicated.

Faced with a backlash from House members, Boehner had, by Sunday, said publicly that he was opposed to the two-month measure.

What was not in doubt was that Senate Minority Leader Mitch McConnell (R-Ky.) had given every appearance on Saturday that after he reached a deal with Reid, it would be the Senate’s last word on the tax fight. He rallied 39 Republican votes for the bipartisan plan, then agreed to shut down the Senate’s legislative business for the rest of the year.

McConnell has publicly backed Boehner, calling for the House and Senate to appoint a conference committee to work out differences between the bill passed last week in the GOP-controlled House and the Senate’s two-month deal.

But as the House drama unfolded, a small but influential band of Senate Republicans broke ranks with Boehner, castigating his leadership team for risking a tax increase at the start of the year rather than simply approving the Senate bill and then beginning longer-term negotiations for a full year’s benefit.

“What is playing out in Washington, D.C., this week is about political leverage, not about what’s good for the American people. Congress can work out a solution without stopping the payroll tax-cut extension for the middle class,” Sen. Dean Heller (R-Nev.), who served with House Republicans for 41 / 2 years until his appointment to the Senate in the spring, said in a statement.

Heller was one of four GOP senators facing potentially difficult reelection campaigns next November who spoke out against Boehner’s actions, giving the appearance that there was a coordinated effort to create distance from the House effort.

At the White House, press secretary Jay Carney said House Republicans should “do the right thing” and pass the Senate measure. But asked if Obama had been in contact with Boehner to discuss how to proceed, Carney responded, “It’s not our job to negotiate between him and Senate Republicans.”

Paul Kane covers Congress and politics for the Washington Post.
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