Boehner: House Republicans oppose Senate payroll tax deal


Senate Minority Leader Sen. Mitch McConnell (R-KY) is surrounded by members of the press as he leaves his office for the day December 16, 2011 on Capitol Hill. (Alex Wong/GETTY IMAGES)
December 18, 2011

House Speaker John Boehner (R-Ohio) said Sunday that he and other House Republicans are opposed to the two-month payroll tax cut deal that overwhelmingly passed the Senate on Saturday, casting uncertainty on the future of a measure that leaders of both parties have said must pass before the end of the year.

In an appearance on NBC’s “Meet the Press,” Boehner said the short-term package, which was negotiated by Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.), should be re-worked by a conference committee in order to reach a longer deal that is acceptable to House Republicans.

“Well, it’s pretty clear that I and our members oppose the Senate bill,” Boehner said. “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.”

Boehner’s comments came a day after the Senate agreed to a two-month extension in a payroll tax cut and unemployment benefits that will expire Jan. 1, top priorities for President Obama and congressional Democrats.

The White House and congressional Democrats responded that if the House does not proceed on the compromise that overwhelmingly passed the Senate, Republicans will be to blame.

“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,” White House Communications Director Dan Pfeiffer said in a statement. “After months of opposition, we are glad that Republicans were finally showing a willingness to not raise taxes on middle class families.”

Pfeiffer added that the White House 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.”

Reid noted in a statement that Boehner last week requested that he and McConnell work together on a compromise.

“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. . . .Neither side got everything they wanted, but we forged a middle ground that passed the Senate by an overwhelming bipartisan majority,” Reid said.

Boehner called the House-passed measure a “reasonable, responsible bill” and contended that the two-month deal would bring uncertainty to the economy.

“If you talk to employers, they talk about the uncertainty,” he said. “How can you do tax policy for two months? So, we really do believe it’s time for the Senate to work with the House, to complete our business for the year. We’ve got two weeks to get this done. Let’s do it the right way.”

Asked whether House Republicans might attempt to totally rework the bill when they return to Washington on Monday, Boehner said the measure should be negotiated by a bipartisan, bicameral conference committee just as the nearly $1 trillion government funding measure that passed both chambers late last week was.

“Under the Constitution, when we have these disagreements, there could be a formal conference between the House and Senate to resolve our differences,” Boehner said. “But our members really do believe, we have to do our work. . . . And earlier this week, both the House and Senate, in a bipartisan, bicameral way, funded our government through Sept. 30. We did it in a regular process, regular order, and what the regular order here is a formal conference between the House and Senate.”

Complicating matters is the fact that the Senate on Saturday adjourned for the year – and even though the chamber will be holding brief “pro forma” sessions every few days for the next two weeks, most lawmakers have departed Washington.

Boehner declined to say whether there might be a resolution to the payroll tax debate before Christmas.

“I don’t know,” he said. “All I know is that it’s time to do this the right way. . . .It’s time to do the right thing for the American people. No kicking the can down the road.”

Extending the items for only a brief time came at a heavy price for Democrats — a requirement that Obama quickly decide whether to issue a construction permit for the controversial 1,700-mile Keystone XL pipeline.

That means Congress could be back to the same arguments in February — whether to let taxes rise and unemployment benefits lapse — just as Obama prepares to issue a ruling on the pipeline, which union leaders back but environmentalists oppose.

“As much fun as we had this time, it’ll be a lot more fun next time,” Sen. Ben Nelson (D-Neb.) said.

In a conference call Saturday, House Republicans voiced vigorous opposition, said a member who took part. .

“House Republicans are furious. . . . It was a chorus of frustration with the Senate. They’re always in punt formation,” said Rep. Jason Chaffetz (R-Utah), a college football kicker. “If we want jobs and if we want the economy to grow, we need some stability and predictability. This will make the situation worse, not better.”

He said rank-and-file House Republicans appeared eager to change the Senate package.

Leading House Democrats indicated that they will urge their members to back the deal.

If the House approves the deal, the White House has indicated that Obama will probably deny the pipeline permit, on guidance from the State Department that the 60-day window in the bill to make a decision is not long enough to complete necessary reviews of the routing through an environmentally sensitive area of Nebraska.

But Republicans would surely use that decision to accuse Obama of blocking a project they say will create jobs. And they could try to trade a further extension of the tax cut in February for a decision to allow the project to move ahead or for another GOP initiative.

“It seems like an issue that, once people understand it, it’d be difficult for the administration to deny without Congress acting again,” Sen. Rob Portman (R-Ohio) said of the pipeline, which would carry Canadian oil to the Gulf Coast. “So, I think it comes back up.”

Democrats are likewise itching for another round of debate on the payroll tax holiday, which polls show is broadly popular.

On Saturday, Obama signaled he will take up that argument quickly after House passage, saying it would be “inexcusable” for Congress not to keep the tax holiday in place for all of 2012.

“It should be a formality, and, hopefully, it’s done with as little drama as possible when they get back in January,” he said.

Democrats would use the fight to echo their central election-year theme — that Republicans protect the wealthy at the expense of the middle class. In the next round, they would renew demands that the middle-class tax holiday be funded with a surtax on those who make more than $1 million a year.

“It’s a fight we welcome,” Sen. Charles E. Schumer (D-N.Y.) said.

GOP leaders have supported extending the payroll tax holiday. But many rank-and-file Republicans have had to be coaxed into it, fretting about the impact on Social Security and disputing Obama’s contention that letting workers keep more of their paychecks for a few months would spur the economy. The federal retirement program is funded through payroll taxes paid by workers and their employers.

The unusual Saturday vote in the Senate capped a wild week on Capitol Hill. Democrats seeking a deal on the tax-cut issue held up a separate agreement that had been reached on a $1 trillion government funding measure.

With a short-term funding measure expiring at midnight Friday, the stalemate left many federal agencies facing the possibility of a shutdown, the fourth such threat this year. After the spending bill was tweaked late in the week to satisfy White House concerns, the drama over the measure was also settled Saturday, with the Senate adopting a bill that details spending for three-fourths of government agencies through Sept. 30.

But the week’s standoff made for an odd reversal of Washington’s ideological clashes: Many Republicans agreed to a tax cut with reluctance, and Democrats briefly stood in the way of appropriating funds needed to provide basic government services.

On the payroll tax package, the Senate arrived at a two-month deal after talks fell apart over how to pay to keep the tax rate at 4.2 percent instead of its standard 6.2 percent for a full year.

The $33 billion two-month package includes the $20 billion tax cut, an $8.4 billion extension in jobless benefits and a brief postponement of a scheduled cut in Medicare reimbursement rates paid to doctors, at a cost of $4 billion.

In the end, the Senate agreed to pay for the measure by raising fees charged to homeowners who buy a new house with a loan guaranteed by Fannie Mae or Freddie Mac.

A homeowner buying or refinancing a house that costs $220,000 will, on average, pay less than $15 in additional charges a month, a change that will raise $36 billion over 10 years, congressional aides said.

The higher fees have been embraced by both parties as a way to allow private insurers to better compete with Fannie Mae and Freddie Mac, which insure nine out of every 10 home loans made in the United States and are widely thought to undervalue loan risk.

The two-month deal represents only the most recent in what has amounted to a Russian doll’s worth of postponements of tough choices by Congress.

This deal was necessary because the deficit-reduction supercommittee failed last month to come to an agreement that would roll a solution to the payroll tax issue into a broad deficit-reduction strategy, as leaders had hoped.

The supercommittee was created because Congress failed to arrive at a grand bargain to greatly cut the debt and reform taxes and entitlements as part of the August deal to raise the nation’s legal borrowing limit. In that deal, Congress asked the 12-member panel to give it a try.

But the two-month deal would let a battered, divided Congress do the one thing that could improve its public reputation: Take a break from its nasty fights and leave Washington for the holidays.

Staff writer David Nakamura contributed to this report.

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