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House And Senate At Standoff Over Payroll Tax Cut Extension

USCapitoldomeCNN

Congress showed little sign of resolving its partisan standoff Tuesday over the payroll tax cut extension as the Republican-controlled House of Representatives passed a measure calling for more negotiations, and leaders in the Democratic-controlled Senate insisted they won't go along with it.

The House motion, passed with no Democratic support on a 229-193 vote, expressed House disagreement with the Senate plan called for the dispute to be immediately taken up by a House-Senate conference committee -- something already ruled out by Senate Majority Leader Harry Reid, D-Nevada.


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The House is expected to pass a resolution later Tuesday supporting a year-long extension of both the payroll tax cut and emergency federal unemployment benefits. House Republicans are also pushing for a new, two-year "doc fix," or delay in significant scheduled pay cuts to Medicare physicians.

All three measures are currently set to expire December 31.

The Senate voted 89-10 on Saturday in favor of a two-month extension of the payroll tax cut, unemployment benefits and the "doc fix" spending -- a fallback plan designed to give both sides more time to negotiate.

However, that short-term compromise has slammed into a conservative roadblock in the House, where rank-and-file Republicans are fuming over the two-month time period of the plan, among other things.

As the clock ticks down, nobody appears willing to bend and neither side seems to know how to break the logjam.

House Speaker John Boehner, R-Ohio, called on President Barack Obama to order the Senate to return from its holiday recess and appoint negotiators. The House already has come back from its holiday break to respond to the Senate's two-month proposal.

In a letter to Obama made public by Boehner's office, the speaker said, "I ask you to call on the Senate to return to appoint negotiators so that we can provide the American people the economic certainty they need."

"Who doesn't believe that if we don't do this now that when we get to February 28th, guess where we'll be? We'll be right here doing the same thing that we are doing right now. I just think the American people expect us to do our work," Boehner said during debate on the House floor.

White House spokesman Jay Carney told reporters Tuesday that the House needs to pass the Senate two-month extension so that a full one-year extension can be worked out.

"In order for it to get done it has to pass the House," Carney said, adding that Obama "cannot order the extension of the payroll tax cut. Congress has to take action."

Democratic leadership aides in the Senate told CNN Tuesday morning that their side won't take part in a conference committee until the Republicans agree to the two-month extension. House Republican members said they will go on break after Tuesday's votes, and won't return until there's a conference committee deal.

Meanwhile, each side spent much of the day accusing the other of acting irresponsibly.

The Senate's "two-month plan is simply unworkable. Families, employers, and workers can't live their lives month to month," declared House Majority Leader Eric Cantor, R-Virginia. "Washington needs to stop adding confusion and more uncertainty to people's lives."

Rep. John Lewis, D-Georgia, ripped Republicans for allowing Congress to go "into this holiday season without helping our unemployed brothers and sisters (and preventing) seniors from seeing their doctors."

"What is happening here today is shameful. It is a disgrace. It is unreal. It is unbelievable," he said. "Where is your compassion? Where is your heart? Where is your soul?"

The political consequences of a failure to act could have major economic and political fallout. The payroll tax break alone is worth roughly $1,000 a year for an average family and affects about 160 million Americans. Numerous observers believe Obama is preparing to parrot Harry Truman's 1948 campaign next year by running against an unpopular, dysfunctional Congress controlled partly by the GOP.

House GOP leaders' decision not to hold a direct up-or-down vote on the $33 billion Senate plan -- an apparent reversal of earlier plans -- came after a two-hour meeting of the entire House Republican caucus late Monday.

House Minority Leader Nancy Pelosi, D-California, told reporters that the change probably meant Boehner and his lieutenants lacked enough support from their own members to guarantee a defeat for the Senate bill.

In the 434-member House chamber -- one seat is currently vacant -- the 242-seat Republican majority can only afford 26 defections to overcome a unified 192-seat Democratic minority.

South Carolina Rep. James Clyburn, part of the House Democratic leadership, said Monday night his party's caucus was 99% in support of the Senate measure.

A House GOP leadership aide conceded to CNN that it is a "cleaner message" to simply vote to affirm the House position on extending the payroll tax cut for a year, instead of opposing a two-month extension.

"We outright reject the attempt by the Senate to kick the can down for 60 days," Cantor said after Monday night's caucus meeting.

Reid has said he has no intention of considering the new GOP plan. On Monday, he blasted Boehner for allegedly abandoning the Senate compromise.

"I negotiated a compromise (with Senate Minority Leader Mitch McConnell, R-Kentucky) at Speaker Boehner's request. I will not reopen negotiations until the House follows through and passes this agreement that was negotiated by Republican leaders and supported by 90% of the Senate," Reid said.

Carney also emphasized that the bipartisan support in the Senate showed that it was House Republicans in the minority on the issue, with the White House, Democrats and Senate Republicans all calling for the two-month extension passed by the Senate.

Democratic legislators, meanwhile, noted it was Republicans blocking progress in Congress. Senate Republicans objected to a floor vote on the House GOP payroll tax plan, while House Republicans now have prevented an up-or-down vote on the Senate measure that had broad GOP support, they noted.

Boehner, however, said Monday night that "we disagreed with what the Senate produced."

"They did their job," he said of his call last week for the Senate to send the House a proposal. "They produced a bill, and the House disagreed with it."

While there are sharp differences over how to proceed, both the House and Senate versions of the legislation extend the tax cut, unemployment benefits and the doc fix. Both measures also would push for presidential action on the proposed Keystone XL oil pipeline from Canada to the Gulf of Mexico -- something demanded by Republicans.

On Monday, at least five mostly moderate Republican senators voiced disapproval with the likely House rejection of the Senate plan, a sign of increasing pressure on House Republicans to pass it.

The group included Massachusetts Sen. Scott Brown, Maine Sens. Olympia Snowe and Susan Collins, Indiana Sen. Richard Lugar and Nevada Sen. Dean Heller.

"During this time of divided government, both parties need to be reasonable and come to the negotiating table in good faith," said Brown, who is facing a stiff re-election challenge in heavily Democratic Massachusetts next year. "We cannot allow rigid partisan ideology and unwillingness to compromise stand in the way of working together for the good of the American people."

Meanwhile, five Democratic senators called on House Republicans to pass the Senate plan in order to speed up approval of the Keystone pipeline.

Congressional Democratic leaders insist the Republican-led House will be blamed for a year-end increase in working Americans' tax bills if it fails to go along with the Senate.

"This is a pass-the-popcorn moment for Democrats," one senior congressional Democratic leadership aide told CNN Monday. "Boehner has been hung out to dry by his caucus, and we are not going to save him."

Boehner appears to have reversed himself since a conference call with caucus members Saturday, when he was the only House Republican leader to express support for the Senate plan, according to a GOP source.

The source said Boehner described the Senate vote as "a good deal" and "a victory" in the conference call. For his part, the speaker insisted Monday that he raised concerns about the Senate plan "from the moment I heard of it."

Boehner said he only praised a provision in the Senate bill requiring presidential action on the Keystone pipeline.

"The rank-and-file members are extremely opposed" to the Senate plan, a GOP source stressed, adding that most members were concerned with the uncertainty caused by just a two-month extension, as well as the political benefit the White House could gain in the national dialogue over taxes.

The Senate's two-month measure would reduce the deficit by nearly $3 billion, according to the Congressional Budget Office.

Under the plan, the $33 billion in costs would be offset by an increase in fees that new homeowners with federally backed mortgages will pay to Fannie Mae, Freddie Mac and the Federal Housing Administration. Those entities would then turn that money over to the U.S. Treasury.

The bump amounts to about $15 per month for every $200,000 borrowed, Senate aides estimated.

Most senators agreed on a two-month extension as a fallback position after Democrats and Republicans were unable to reach a more long term, comprehensive agreement.