The future of the Senate’s recent payroll tax credit extension was cast in doubt Sunday, as House Republicans, led by Speaker John Boehner (R-Ohio), expressed opposition to the Senate measure and its offering of what he views as a short-term fix.
“Two months is just kicking the can down the road,” Boehner said Sunday on NBC’s Meet the Press, referring to the two-month extension contained in the Senate bill.
“We had a reasonable, responsible bill that we sent over to the Senate,” Boehner added, referring to the House proposal’s one-year extension of the tax credit extension. “If you talk to employers, they talk about the uncertainty. How can you do tax policy for two months?”
In response, Democratic Leader Nancy Pelosi (D-Calif.) accused House Republicans of bowing to extremists in the party by delaying passage. “By holding up this bipartisan compromise, Tea Party House Republicans are walking away once again, showing their extremism, and clearly demonstrating that they never intended to give the middle-class a tax cut,” she said in statement Sunday.
Both proposals address a 2 percentage point reduction in the Social Security payroll tax rate—from 6.2 percent down to 4.2 percent—which is set to expire Jan. 1. The Senate proposal extends the credit until Feb. 29, while the House wants extension through 2012.
The House and Senate measures also extend benefits for the long-term unemployed, but House Republicans are including revisions reducing the length of such benefits, and allowing states to drug test beneficiaries.
The two versions also address shortfalls in payments to doctors who treat Medicare patients, known as “doc fix.”
Congressional Republicans have added a rider to both proposals calling for the president to approve or deny the Keystone XL pipeline permit within 60 days. President Obama has threatened to veto a bill containing the Keystone XL provision.
The Senate measure passed 89–10 on Saturday with bipartisan support. Senate Minority Leader Mitch McConnell (R-Ky.) said his party had done so begrudgingly. “Let me just start by saying the bill we’re about to vote on is not the bill I would have written,” he said, claiming his party voted to “work with the other side.”
Senate Majority Leader Harry Reid (D-Nev.) defended his party’s proposal. “Democrats have worked tirelessly to prevent a thousand-dollar tax increase on middle-class families, but my Republican colleagues wouldn’t agree to long-term tax relief unless Democrats agreed to cut Medicare benefits for seniors.”
Renewed Negotiations
The House is set to formally vote this week on whether to amend the Senate bill or call for negotiations between the two houses on a new proposal. Boehner is ready to start over. “We’ve got two weeks to get this done. Let’s do it the right way,” he said.
Despite supporting the Senate measure, McConnell spokesman Don Stewart on Sunday said the senator was also for renewed negotiations. “The best way to resolve the difference between the two-month extension and the full-year bill, and provide certainty for job creators, employees, and the long-term unemployed, is through regular order, as the Speaker suggested,” said Stewart, according to Politico.
Congress is already working well into their traditional holiday break to complete outstanding agenda items. Last week they passed legislation to fund the federal government into September 2012.
President Obama has said the government will not break for the holidays until the payroll tax cut legislation is passed and signed. “Congress should not go home for vacation until it finds a way to avoid hitting 160 million Americans with a tax hike on Jan. 1,” the president said at a White House briefing Dec. 17.
