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House begins debate on short-term extension of payroll tax cut

This article first appeared in the St. Louis Beacon, Dec. 20, 2011 - Update: A procedural measure passed on a party-line vote late Tuesday morning, clearing the way for debate of the Republican proposal to turn down the Senate measure and establish a negotiating committee so the two chambers could resolve their differences. | New York Times

Earlier Beacon story: WASHINGTON -- With time running out before the payroll tax cut expires, House Republican leaders are balking at the short-term Senate deal to extend the tax cut for two months while a longer-term fix can be worked out.

"It's pretty clear I and our members oppose the Senate bill," House Speaker John Boehner, R-Ohio, said Sunday on NBC's Meet the Press. "I believe two months [extension] is just kicking the can down the road."

The last-minute House GOP opposition after Saturday's bipartisan 89-10 vote to approve the short-term fix upset Democrats and may have endangered prospects for the payroll tax extension. Boehner said he is pressing for the Senate to return to session and reach a compromise between its fix and the year-long extension approved by the House.

"Speaker Boehner says he does not want to 'kick the can down the road,'" said Sen. Dick Durbin, D-Ill., in a statement Sunday. "His stubborn refusal to accept this bipartisan approach will endanger a tax cut and kick America's middle class off the road."

Senate Majority Leader Harry Reid, D-Nev., warned that, if the House "refuses to vote on the bipartisan compromise that passed the Senate with 89 votes, Republicans will be forcing a $1,000 tax increase on middle-class families on Jan. 1."

A Reid spokesman said Sunday that the Senate would not return this week if the House kills the Senate-passed deal. But a spokesman for Senate Republican Leader Mitch McConnell, R-Ky., said a new compromise may need to be worked out to extend the payroll tax cut for a full year, rather than just the two-month patch.

Blunt thinks deal is possible

Some Republican senators agreed with Boehner's position. Sen. Mark Kirk, R-Ill., who voted against the short-term payroll tax extension because it would continue to divert funds from the Social Security trust fund, tweeted: "Perhaps House fully realized Senate's two-month kick-the-can bill cuts contributions to Social Security by $20 billion."

Even though he voted for the two-month compromise, Sen. Roy Blunt, R-Mo., said on CNN that he understood the qualms of House GOP members about it. And he said he was optimistic that a compromise could be worked out.

"I had a couple of calls from some of my buddies in the House this morning saying, 'We don't want to do this.' The one-year extension that the House voted for was bipartisan, too," Blunt said. "I guess we'll just have to work this out .... I think friends in the House are going to have to work through this."

Boehner said that many House Republicans complained during a conference call late Saturday that the $33 billion Senate bill lacked serious spending cuts. But Democrats countered that it would be paid for with a monthly fee on households that get mortgages from Fannie Mae or Freddie Mac.

Blunt said he still thinks a deal can be worked out and approved by year's end. "Nobody wants any of these things to happen, so I believe this will be worked out in a way that doesn't raise taxes, that hopefully helps create some additional private-sector jobs," Blunt said.

For her part, Sen. Claire McCaskill , D-Mo., said House GOP opposition to the Senate fix was puzzling. "Huh? Senate votes 89-10! to make sure taxes don't go up for working folks. House Rs balking. Talk about extreme," McCaskill tweeted Sunday. "Rs in House will fiercely fight to prevent taxes going up even a dime on mega wealthy, but ok with taxes going up on working families. Weird."

White House Communications Director Dan Pfeiffer called on House Republicans to "stop playing politics and get the job done" by going along with the two-month extension and then working to find a compromise that would extend the payroll tax for a year.

$1,000 per family

Without congressional action by year's end, the payroll tax withheld from wages would increase by two percentage points -- to a 6.2 perent rate -- on Jan. 1. The average American family would end up paying about $1,000 extra a year.

On Sunday, Boehner suggested that a House-Senate conference meet over the next two weeks to resolve the differences between the Senate's short-term fix and the year-long extension approved by the House earlier this month. But most Democrats objected to numerous provisions of that GOP-backed bill.

That House bill would maintain the payroll tax at 4.2 percent, extend unemployment benefits for 79 weeks (rather than 99), but requires testing for illegal drugs and says high school dropouts must get a GED-equivalency to get such benefits. The House bill also would weaken an EPA rule on pollution from industrial boilers and would extend the tax break for businesses buying equipment for 2012.

Aside from the tax cut extension, the Senate bill renews 99 weeks of unemployment benefits and extends the "doctor fix" that would avoid a 27 percent reimbursement cut from Medicare to physicians. It also would require President Barack Obama to approve the proposed 1,700-mile Keystone XL pipeline from Canada to Texas within 60 days or issue a finding that it's not in U.S. national interest.

Many Democrats object to how the House bill proposes to pay for its $180 billion cost: by extending the current pay freeze on civilian federal workers for another year and requiring them to contribute more toward their pensions; raising the fees Fannie Mae and Freddie Mac charge for insuring mortgages; raising Medicare premiums paid by higher-income elderly; cuttting some health care overhaul law programs; selling part of broadcast spectrum; barring illegal immigrant parents from collecting child tax credit refund checks; and blocking food stamps and unemployment benefits for the wealthy.

Sen. Chuck Schumer, D-N.Y., said Sunday that failure to pass legislation to extend the payroll tax cut could cost Republicans their majority in the House. "This is a test of whether the House Republicans are fit to govern, and it is a make-or-break moment for John Boehner's speakership," he asserted.

Durbin, the second-ranking Senate Democratic leader, said that "America has had its fill this year of repeated political ultimatums from Speaker Boehner."

But Boehner said on NBC that the House legislation is "a reasonable, responsible bill. ... So we really do believe it's time for the Senate to work with the House to complete our business for the year."

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