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VOL. 127 | NO. 26 | Wednesday, February 8, 2012

Payroll Tax Cut Talks Adrift on Capitol Hill

ANDREW TAYLOR | Associated Press

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WASHINGTON (AP) – The prospects for an extension of President Barack Obama's signature payroll tax cut, once considered a slam dunk on Capitol Hill, now seem far less certain as House-Senate talks have deadlocked over finding ways to pay for it.

In a contentious negotiating session Tuesday, Democrats came out against House GOP proposals to pay for the two percentage point payroll tax holiday through freezing federal workers' pay and requiring more affluent seniors to pay more for Medicare premiums.

Also at stake is a renewal of jobless benefits for people who have been out of work for more than six months and repairing an outdated government formula to prevent doctors from having to bear a huge cut in their Medicare payments.

After four public sessions, the House-Senate talks have failed to yield a single significant breakthrough, leading party leaders in both the GOP-dominated House and Democratic majority Senate to lob charges that their rivals are slow-walking the negotiations.

"We have significant concerns about whether Senate Democrats are really willing to step up and work with House Republicans on the payroll tax cut bill," House Speaker John Boehner, R-Ohio, told reporters Tuesday. "Senate Democrats have never come to the table with a plan to offset this new spending that they're all for."

For his part, Senate Majority leader Harry Reid, D-Nev., has threatened to bring up a whole new measure if the House-Senate negotiations remain stalled.

Michigan Rep. Dave Camp, the top GOP negotiator, has turned the focus to the most contentious issue: finding ways to foot the bill for $150-160 billion cost of the measure.

But Camp, a top Boehner lieutenant, has yet to invite Democrats to discuss their ideas to pay for the legislation, insisting – at least for now – on obeying arcane rules that limit the scope of the debate to the GOP ideas that have passed the House on a near-party line vote last year. That has lead to meandering discussions on topics like blocking EPA rules on emissions from industrial boilers and allowing states to impose drug tests on people receiving jobless benefits.

Tuesday's almost three-hour discussion, like three previous ones, involved speechifying instead of real negotiations.

Lawmakers lobbed charges back and forth over whether it was fair for three million federal civilian workers should have their pay frozen for a third consecutive year to help pay for the tax cut and whether seniors with income exceeding $80,000 a year should pay more for their Medicare coverage.

"It seems to be the flavor of the day to go after federal workers," said Rep. Chris Van Hollen, D-Md.

Leader Democratic negotiator Sen. Max Baucus of Montana added that, "We should not be penalizing (Medicare) beneficiaries while we're increasing doctor fees."

But Sen. Jon Kyl, R-Ariz., a veteran of the failed budget "supercommittee" and deficit talks last year involving Vice President Joe Biden, said the ideas had been all but agreed to in negotiations last year.

"We're hearing 'no' for the sake of hearing 'no,'" said Rep. Kevin Brady, R-Texas.

Negotiators also split over whether people who receive health insurance subsidies under the Obama's new health care law should have to repay a greater portion of overpayments they may receive. It's a complicated topic, but Democrats have supported the idea in previous legislation.

Democrats came out in opposition to each idea, saying it would be unfair to make spending cuts affecting the middle class to pay for the payroll tax measure. But Republicans shot back that the so-called millionaires' surcharge went nowhere in the Senate and that the cuts have to come from somewhere.

As for the partisan pot-shots from top leaders Reid and Boehner, Camp said: "I don't think the comments from either side of leadership, from either body, are particularly helpful."

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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