House Begins Debating Payroll Tax Cut

WASHINGTON (AP) -- With neither side showing signs of yielding, a bitterly divided House debated a Republican effort Tuesday to force the Senate to negotiate a payroll tax cut and jobless benefits due to expire on New Year's Day.


The GOP-run House planned a vote on rejecting a two-month extension of the tax cut and unemployment benefits that the Senate passed last weekend with a bipartisan landslide. They were also ready to vote to formally request the Senate to begin fresh talks on the legislation.

The Democratic-led Senate left town on Saturday after approving its version of the bill. Senate Majority Leader Harry Reid, D-Nev., has said he won't renew bargaining until the House approves the Senate's short-term measure.

Without an agreement, payroll taxes paid by 160 million workers and jobless benefits that support millions of the long-term unemployed will expire Jan. 1. With their cherished holiday recess being shortened each day the battle rages, each side blamed the other for the impasse.

"If you say you want to do this for a year, put your vote where your rhetoric is," said Rep. Jeb Hensarling of Texas, a member of the House GOP leadership. "If you're not willing to work over the holidays, admit to the American people that you're not willing to work over the holidays."

"Show us that you can govern," said Rep. Jim McGovern, D-Mass. "This is time for an adult moment. It's time to show your tea party wing that the American people come first."

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 President Barack 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."

Meanwhile, Medicare announced Tuesday that, as it has in the past when doctors' reimbursements have been cut through congressional inaction, it would withhold physician payments for two weeks in January to avoid passing on a 27 percent cut in Medicare fees. The hope is that the problem gets fixed by then.

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, divisions among Republicans 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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