Payroll tax cut extension in doubt amid House Republican uproar

December 18, 2011

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.

“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.”

Pfeiffer said that the administration believes Congress must continue working toward a one-year deal but that lawmakers “should pass the two-month extension now to avoid a devastating tax hike from hitting the middle class in just 13 days.”

Boehner received a boost from McConnell, who echoed the speaker’s call for lawmakers to amend the Senate-passed plan.

“The House and the president both want a full-year extension,” McConnell spokesman Don Stewart said. “The best way to resolve the difference between the two-month extension and the full-year bill, and provide certainty for job creators, employees and the long-term unemployed, is through regular order, as the speaker suggested.”

The way forward remains unclear.

When the House convenes Monday night, it will hold an up-or-down vote on the Senate-passed plan, which Republicans expect will fall short of passage. The chamber may then move to amend the Senate-passed bill or to approve a motion for both chambers to iron out the impasse through a conference committee. Boehner made the case in his “Meet the Press” appearance for a conference committee, saying that was the approach used by lawmakers to reach an agreement on a nearly $1 trillion government funding bill that passed both chambers last week.

“Earlier this week, both the House and Senate, in a bipartisan, bicameral way, funded our government through September 30,” Boehner said. “We did it in a regular process, regular order, and what the regular order here is a formal conference between the House and Senate.”

The Senate, which adjourned for the year Saturday after approving the payroll tax package, could come back to Washington to work on the measure. But Reid’s statement Sunday suggested that, at least for the moment, leaders have no intention of doing so.

A House Democratic aide said leaders exchanged phone calls all day Sunday and that members were planning to hold a full caucus meeting Monday.

In the meantime, both sides remain at odds over just how Friday’s apparent deal turned into Saturday’s stalemate.

The biggest lingering question: whether McConnell and Boehner were working closely in tandem throughout the final round of negotiations or whether, as GOP aides in both chambers said Sunday, McConnell was negotiating on his own and not as Boehner’s proxy.

The latter notion was contradicted somewhat by McConnell himself, who told reporters Friday night that he stayed in close contact with Boehner throughout his negotiation with Reid.

“I’m optimistic that we’re going to do well in the morning, and obviously I keep the speaker informed as to what I’m doing,” McConnell said.

If Boehner was apprised of McConnell’s conversations, then the question becomes whether he and other House Republican leaders misjudged how their members would react to a two-month deal. Many rank-and-file Republicans voiced such strong opposition to a short-term plan during a closed-door meeting Friday that several lawmakers said they believed such a plan would be a non-starter.

Senate Republicans, however, overwhelmingly voted for the two-month plan Saturday.

Democrats seized Sunday on the GOP discord, arguing that Boehner had reneged on negotiations and yielded to his conservative base.

A House Republican aide said leaders were not taken aback by the harsh reaction to the deal during a conference call with rank-and-file members Saturday. A Senate Republican aide maintained that “we did not know what the House would do, so it’s hard to say it was a surprise.”

Staff writers Paul Kane and Rosalind S. Helderman contributed to this report.

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