Payroll tax cut extension in doubt amid House Republican uproar

The fate of a payroll tax cut extension backed by the White House and overwhelmingly passed by the Senate is uncertain after a restive House Republican conference expressed displeasure with the two-month deal.

Faced with the uprising on his right flank, House Speaker John A. Boehner (R-Ohio) retreated Sunday from his previous support for the package, saying the House does not expect to approve that plan on Monday night after it returns to Washington.

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President Obama said he was "very pleased" that the Senate voted to extend the payroll tax cut, averting a tax increase for millions of workers on January 1, 2012. (Dec. 17)

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“Well, it’s pretty clear that I and our members oppose the Senate bill,” Boehner said in an appearance on NBC’s “Meet the Press.” “It’s only for two months. You know, the president said we shouldn’t go on vacation until we get our work done. And frankly, House Republicans agree.”

The move sets up the latest game of brinkmanship on Capitol Hill, in which a failure by lawmakers to pass a deal before New Year’s Day will result in a two percentage-point payroll tax increase on 160 million workers, the termination of unemployment benefits for some jobless Americans and a reduction in reimbursement rates for doctors who treat Medicare patients. Far-reaching repercussions for both political parties also loom.

House Republicans oppose the short-term nature of the deal, arguing that it would be bad tax policy to provide just a two-month extension as well as bad politics to keep the issue alive for President Obama.

“Frankly, I don’t think anybody in the House Republican conference sees it as much of a compromise,” Rep. Tom Cole (R-Okla.) said of the Senate-passed deal.

He said Republicans were pleased that they had won the inclusion of a provision forcing a speedy decision by the Obama administration on whether to grant a permit for the Keystone XL oil sands pipeline, which the GOP says will lead to the creation of thousands of jobs. But, Cole added, there is “a lot of angst” among lawmakers on the duration of the tax-cut extension.

“Our conference is prepared to stay here to work through Christmas, New Year’s, whatever it takes,” he said.

Congressional Democrats and the White House dug in their heels Sunday and cast the decision facing Boehner as one between a bipartisan, short-term extension of the payroll tax holiday and no extension at all.

Senate Majority Leader Harry M. Reid (D-Nev.), who had negotiated the deal with Senate Minority Leader Mitch McConnell (R-Ky.) late Friday, urged the House to take up the Senate-passed measure and noted that Boehner last week had requested that the two Senate leaders meet to work toward an agreement.

“I would hate to think that Speaker Boehner is refusing to act on this bipartisan compromise because he is afraid it will actually pass, but I cannot imagine any other reason why he would not bring it up for a vote,” Reid said in a statement.

Boehner also came under withering fire from the White House, with White House communications director Dan Pfeif­fer arguing that “if House Republicans refuse to pass this bipartisan bill to extend the payroll tax cut, there will be a significant tax increase on 160 million hardworking Americans in 13 days that would damage the economy and job growth.”