The House on Tuesday rejected a bipartisan Senate compromise to extend a payroll tax cut for two months, along with unemployment benefits, plunging Washington into uncertainty just days before Christmas about the fate of the tax cut enjoyed by 160 million workers.
On a vote of 229 to 193, the House set aside the Senate bill and requested a formal conference with the Senate, setting up a showdown with the Democratic-controlled Senate and President Obama, who has demanded that the House approve the short-term plan now to avoid a Jan. 1 tax hike.
Seven Republicans voted against defeating the Senate bill and sending the legislation to conference, including Reps. Charles F. Bass (N.H.), Jeff Flake (Ariz.), Christopher P. Gibson (N.Y.), Timothy V. Johnson (Ill.), Walter B. Jones (N.C.), Jaime Herrera Beutler (Wash.) and Frank R. Wolf (Va.). Flake opposes any form of payroll tax cut extension.
Democrats, who have pushed for the full-year payroll tax cut for months, say Congress should accept the temporary measure now and return in January to solve an impasse over how to extend the cut for the full year.
The Senate deal would also postpone a scheduled cut in reimbursement rates for doctors who treat Medicare patients.
Shortly after the House vote, Obama called on House Republicans to “put politics aside” and allow a vote on the Senate bill.
“Let’s not play brinksmanship,” Obama said in the White House briefing room. “The American people are weary of it. They’re tired of it. . . . I’m calling on the speaker and the House Republican leadership to bring up the Senate bill for a vote and give the American people the assurance they need in this holiday season.”
Saying that “time is running out,” he criticized a Republican lawmaker’s description of the showdown as “high-stakes poker.” Obama said: “He’s right about the stakes, but this is not poker. It’s not a game. . . . It’s not a game for the average family who doesn’t have an extra 1,000 bucks to lose.” He warned that the Senate compromise “is the only viable way to prevent a tax hike on January 1.”
Obama said the two-month extension was necessary to give lawmakers more time to work out a full-year extension. He charged that the real reason for House Republican opposition to the Senate deal “is to wring concessions from Democrats on issues that have nothing to do with the payroll tax cut, issues where the parties fundamentally disagree.”
House Speaker John A. Boehner (R-Ohio) implicitly rejected the president’s appeal and insisted that the next step is up to Obama and the Democrats.
“President Obama needs to call on Senate Democrats to go back into session, move to go to conference, and to sit down and resolve this bill as quickly as possible,” Boehner told reporters. “We’ve done our work for the American people. Now, it’s up to the president and Democrats in the Senate to do their job as well.” He said he has named eight lawmakers as GOP negotiators in a conference committee.
House Republicans oppose the Senate bill “because the two-month extension will create more uncertainty for job creators in our country when millions of Americans are out of work,” Boehner said. He also argued that “payroll processing companies say that the Senate bill is unworkable.”
Earlier, White House spokesman Jay Carney told reporters that House Republicans refused to hold a real vote on the bill that got “sweeping bipartisan support in the Senate” because the House Republican leadership was “worried” that it “would actually pass.”
“It is absolutely essential the House reconsider its approach to this and accept that leaders in both parties in both houses and the president of the United States are all committed to a full-year extension,” Carney declared.
“When it comes to what happened this weekend, the president is not and should not be a marriage counselor between Senate Republicans and House Republicans.”
In debate before the procedural votes that shelved the Senate bill, House Minority Leader Nancy Pelosi (D-Calif.) charged that “the extreme tea party element of the Republicans in the House” was blocking an extension of the payroll tax cut and unemployment benefits for millions of Americans.
“They alone are standing in the way of a tax cut for the middle class,” she said.
House Minority Leader Eric Cantor (R-Va.) said the two-month deal would be bad policy. He said the Senate, which had adjourned until Jan. 23, should return to Washington to negotiate the issue in a formal conference committee.
“Families, employers and workers can’t live their lives month to month,” Cantor said. “Washington needs to stop adding confusion and more uncertainty to people’s lives.”
The next step to resolving the situation is extremely uncertain. Senate Majority Leader Harry M. Reid (D-Nev.) has charged that the GOP backed out of a deal reached between both parties in the Senate and pledged that he will not appoint Senate negotiators to restart talks.
Rank-and-file House members, meanwhile, said there will be little for them to do once the conference committee is appointed, and many plan to leave Washington for the holidays. That could potentially undermine the Republican promise to work through Christmas to craft a deal.
Procedurally, the House vote was structured as a motion to reject the Senate’s deal. That meant there was no ability for House members who supported the deal to vote for its adoption.
Democrats charged that Republicans were denying the two-month deal an up-or-down vote because they believed it would pass. Republicans said they wanted to let their members vote affirmatively to reject the Senate bill.
The House set its course of action at a raucous, two-hour closed-door meeting Monday night. 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 Boehner 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 that 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.
Reid said a two-month deal 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 4 1 / 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 whether 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.”
Staff writers William Branigin and David Nakamura contributed to this report.