VOL. 126 | NO. 248 | Wednesday, December 21, 2011
House Republicans Reject 2-Month Payroll Tax Cut
ANDREW TAYLOR | Associated Press
WASHINGTON (AP) – The House Tuesday rejected legislation to extend a payroll tax cut and jobless benefits for two months, drawing a swift rebuke from President Barack Obama that Republicans were threatening higher taxes on 160 million American workers on Jan. 1.
Obama said the two-month compromise is the only way to stop payroll taxes from going up by two percentage points.
"Now let's be clear," Obama said in a surprise appearance in the White House briefing room after the House vote. "The bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on January 1st. The only one."
Obama said failure to pass the Senate version of the payroll tax cut extension could endanger the U.S. economic recovery, which he described as "fragile but moving in the right direction."
Obama is gearing up to run for a second term in next November's elections and there have been suggestions he will borrow a tactic from a past president and charge that a do-thing Congress is responsible for the country's ills.
House Republicans controlling the chamber instead of a two-month extension want immediate negotiations with the Senate on a year-long plan. But the Senate's top Democrat on Tuesday again ruled out talks until the House passes the stopgap measure.
"President Obama needs to call on Senate Democrats to go back into session ... and resolve this bill as soon as possible," said the Republican leader of the House, Speaker John Boehner. "I need the president to help out."
If Congress does not break the stalemate and pass a bill by the end of the year, payroll taxes will go up by almost $20 a week for a worker making a $50,000 salary. Almost 2 million people could lose unemployment benefits as well, and doctors would bear big cuts in Medicare payments.
The House vote, 229-193, kicks the measure back to the Senate, where the bipartisan two-month measure passed on Saturday by a sweeping 89-10 vote. The Senate then promptly left Washington for the holidays. Senate Majority Leader Harry Reid, a Democrat, says he will not allow bargaining until the House approves the Senate's short-term measure.
"I have been trying to negotiate a yearlong extension with Republicans for weeks, and I am happy to continue doing so as soon as the House of Representatives passes the bipartisan compromise to protect middle-class families, but not before then," Reid said.
The House vote caps a partisan debate on Obama's jobs agenda, which has featured numerous campaign-style appearances but little real bipartisan negotiation, other than Senate talks last week that produced the two-month extension.
The Senate's short-term, lowest-common-denominator approach would renew a 2 percentage point cut in a payroll tax, plus jobless benefits averaging about $300 a week for the long-term unemployed. The two-month, $33 billion cost would be financed by a 0.10 percentage point hike in home loan guarantee fees charged by government-backed mortgage giants Fannie Mae and Freddie Mac, which the administration says would raise the monthly payment on a typical $210,000 loan by about $15 a month.
The House passed a separate plan last week that would have extended the payroll tax cut for one year. But that version also contained spending cuts opposed by Democrats and tighter rules for jobless benefits.
Both the House and Senate bills included a provision designed to force Obama to make a decision on construction of the controversial Keystone XL pipeline, which would deliver up to 700,000 barrels of oil daily from tar sands in Alberta, Canada, to refineries in Texas. The provision requires him to issue the needed permit unless he declares the pipeline would not serve the national interest.
Democrats and the White House had reversed course and accepted Republican demands on Keystone, which contributed to sweeping Senate Republican support for the two-month measure. The White House had signaled that Obama would block the project.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.