House GOP to reject stopgap payroll tax cut

ANDREW TAYLOR Associated Press Published:

WASHINGTON (AP) -- With the Senate adjourned for the holidays, House Republicans are moving to shelve a bipartisan two-month extension of the Social Security payroll tax cut that cleared the Senate over the weekend and are demanding instead that their fellow lawmakers return to the Capitol for negotiations.

After a spate of bipartisanship last week, the combatants are back in full-throated warfare over President Barack Obama's payroll tax initiative and other expiring measures, including jobless benefits for almost 1.8 million people who will lose them next month if Congress doesn't act.

Instead of accepting a two-month stopgap Senate measure that would ensure fighting continues into February, Republicans said they would move Tuesday to set up an official House-Senate negotiating panel known as a conference committee. The Senate's top Democrat said he would refuse to negotiate until the House passes the short-term version.

Both sides insist they want to extend the provisions before a Dec. 31 deadline, but that will prove difficult. After overwhelmingly passing a two-month extension Saturday, senators raced for the exits in the belief that the House would see no alternative but to go along. The Senate isn't scheduled to resume legislative work until Jan. 23.

The Senate's short-term, lowest-common-denominator approach would renew a 2 percentage point cut in the Social Security payroll tax, plus jobless benefits for the long-term unemployed, and would prevent a huge cut in Medicare payments to doctors.

But House Republicans quickly erupted in frustration at the Senate measure, which drops changes to the unemployment insurance system pressed by conservatives, along with cuts to Obama's health care law. Also driving their frustration was that the Senate, as it so often does, appeared intent on leaving the House holding the bag -- leaving it no choice but to go along.

"With millions of Americans struggling to make ends meet, it would be unconscionable for Speaker (John) Boehner to block a bipartisan agreement that would protect middle-class families from the thousand-dollar tax increase looming on January 1st," said Senate Majority Leader Harry Reid, D-Nev., who negotiated the two-month extension with Senate GOP leader Mitch McConnell of Kentucky. The 2 percentage point tax cut provides about a $1,000 annual tax cut for a typical earner making about $50,000 a year.

Both sides were eager to position themselves as the strongest advocates of the payroll tax cut, with House Republicans accusing the Senate of lollygagging on vacation and Senate Democrats countering that the House was seeking a partisan battle rather than taking the obvious route of approving the stopgap bill to buy more time for negotiations.

Just a couple of weeks after many Republicans made it plain they thought that the payroll tax cut -- the centerpiece of Obama's autumn jobs agenda -- hadn't worked and that renewing it was a waste of money, Republicans emerged from a closed-door meeting touting their support for the president.

"Do you want to do something for 60 days that kicks the can down the road?" said Rep. Jeb Hensarling, R-Texas. "Or do you want to do what the president asked us to do? And we're people who don't agree with the president all that often."

"I've never seen us so unified," Rep. Louie Gohmert, R-Texas, said as he left a two-hour, closed-door meeting Monday night where Republicans firmed up their plans. He said the payroll tax cut that has been in effect this year failed to create any jobs, but he favored extending it for another 12 months because "it's tough to raise taxes when you're in a down economy."

Congress' approval ratings are in the cellar, in part because of repeated partisan confrontations that brought the Treasury to the brink of a first-ever default last summer, and more than once pushed the vast federal establishment to the edge of a partial shutdown.

This time, unlike the others, Republican divisions were prominently on display.

The two-month measure that cleared the Senate, 89-10, on Saturday had the full support of McConnell, the Republican leader, who also told reporters he was optimistic the House would sign on. Senate negotiators had tried to agree on a compromise to cover a full year, but were unable to come up with enough savings to offset the cost and prevent deficits from rising.

The two-month extension was a fallback, and officials say that when McConnell personally informed Boehner and House Majority Leader Eric Cantor of the deal at a private meeting, they said they would check with their rank and file.

But on Saturday, restive House conservatives made clear during a telephone conference call that they were unhappy with the measure.

Ironically, until the House rank and file revolted, it appeared that Republicans had outmaneuvered Democrats and Obama on one point.

The two-month measure that cleared the Senate required the president to decide within 60 days to allow construction on a proposed oil pipeline that promises thousands of construction jobs. Obama had threatened to veto legislation that included the requirement, then did an about-face.

The president recently announced he was delaying a decision on the pipeline until after the 2012 elections, meaning that while seeking a new term, he would not have to choose between disappointing environmentalists who oppose the project and blue-collar unions that support it.

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