House Republicans oppose Senate payroll tax bill

WASHINGTON Sun Dec 18, 2011 4:50pm EST

Speaker of the House John Boehner (R-OH) speaks with the media after a meeting on legislative business with fellow Republicans on Capitol Hill in Washington December 16, 2011.      REUTERS/Joshua Roberts

Speaker of the House John Boehner (R-OH) speaks with the media after a meeting on legislative business with fellow Republicans on Capitol Hill in Washington December 16, 2011.

Credit: Reuters/Joshua Roberts

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WASHINGTON (Reuters) - The fate of an expiring tax break for 160 million American workers was in doubt on Sunday after the top Republican lawmaker declared his opposition to a two-month extension passed overwhelmingly by the Senate.

House of Representatives Speaker John Boehner's comments highlighted a sharp divide between Republicans in the House and the 100-seat Senate, which passed the modest deal with 89 votes on Saturday.

Boehner said on NBC's "Meet the Press" program that the two-month renewal would create added uncertainty for workers and employers and that Congress should delay its holiday break to ensure that a one-year extension was passed.

"It's pretty clear that I and our members oppose the Senate bill. It's only for two months," Boehner said, adding that this was "kicking the can down the road."

The Republican-controlled House is scheduled to vote on the Senate-passed bill on Monday and is now expected to amend it or request formal last-ditch negotiations with the Senate.

The biggest sticking point for a year-long extension is how to cover the $120 billion in lost revenue to the Social Security Trust Fund. Republicans are demanding spending cuts to cover the cost and Democrats want to pay for it by closing some tax breaks for the wealthy.

Boehner said he wanted House and Senate leaders to reconvene for talks. Just one day earlier, he had told House Republicans they could pass the bill and accept as a victory a provision that would expedite a decision by the Obama administration on a controversial oil pipeline project.

The White House urged Congress to pass the two-month extension resulting from a bipartisan compromise, saying failure to do so would damage the economy and job growth.

"It's time House Republicans stop playing politics and get the job done for the American people," White House communications director Dan Pfeiffer said in a statement.

YEAR-END TAX HIKE LOOMS

By opposing the Senate bill, Boehner is siding with conservative and Tea Party-backed Republicans in the House whom he has had difficulty bringing under control all year, particularly on budget and spending measures.

They defied his leadership in debt-limit negotiations that brought the United States to the brink of default over the summer and cost Washington its prized Triple-A credit rating from Standard & Poor's.

Boehner's hardline stance on Sunday illustrated the quandary he is in - caught between wanting to appease a rebellious caucus and trying to reach a deal in time to ensure Republicans are not blamed for taxes going up in January.

Boehner is widely viewed as a pragmatist and was one of the Republican leaders pushing a skeptical rank-and-file to support extending the payroll tax cut or risk a backlash from angry voters in 2012 congressional and presidential elections.

Senate Majority Leader Harry Reid, a Democrat, noted on Sunday that Boehner had left negotiations on a compromise deal to Reid and his Republican counterpart Senator Mitch McConnell.

Boehner was also known to have been kept informed of the Senate negotiations that produced a deal on Friday night.

"Last week, Speaker Boehner sat in a meeting with Leader Reid and Leader McConnell and he gave Leader McConnell his proxy to negotiate a bipartisan compromise," Democratic Senator Charles Schumer said in a statement. "The Senate came to a deal, and now Speaker Boehner must keep his word."

Other Democrats piled on, with Representative Chris Van Hollen accusing Boehner of "walking away from bipartisan compromises to kow-tow to his extreme Tea Party wing of his caucus."

The high-stakes game of brinksmanship over the payroll tax extension could backfire for Republicans, especially if it is allowed to expire at year-end, resulting in a tax hike of about $1,000 for the average worker. The tax funds the Social Security federal retirement program.

Economists have warned that reverting to the higher payroll tax rate would drain stimulus from an economy struggling to add jobs, making it more vulnerable to recession in debt-stricken Europe.

The two-month extension would be of little help, said Michael Brown, an economist with Wells Fargo Securities.

"It is very likely that the uncertainty over the extension of the payroll tax will weigh on consumers," Brown said.

House Republicans have little to gain from a two-month extension, which would force another round of negotiations starting in late January, when the Republican primary season is in full swing. Electioneering rhetoric would likely dampen conciliaton and complicate the search for a deal.

Reopening the issue then could also make incumbents vulnerable to a fresh round of attacks by Democrats that they only favor tax cuts for the wealthy, not for struggling workers.

President Barack Obama, a Democrat, says the lower 4.2 percent payroll tax rate will help boost economic growth. Without congressional action, the rate on the tax that workers pay into the Social Security retirement fund will snap back to 6.2 percent.

PIPELINE SWEETENER

The two-month extension passed by the Senate contains a provision sought by House Republicans that would force Obama to accelerate a decision on TransCanada Corp's Keystone XL oil pipeline project, which is backed by some labor unions but opposed by environmental groups.

Obama wanted to take a year, beyond November's elections, to review the project, which would connect Canada's tar sands to U.S. Gulf of Mexico refineries. Republicans argue that the pipeline would create jobs at a time when the economy is struggling with an 8.6 percent unemployment rate.

(Additional reporting by William Schomberg in New York and Caren Bohan in Washington; Editing by Ross Colvin and Christopher Wilson)

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Comments (33)
Eideard wrote:
Why would anyone expect Republicans to support a tax break for wage earners? We aren’t the folks who kick in enormous sums to the RNC and KoolAid Party phonies. All we do is work for a living and generate profits for the country club-sluggos who own the Republican Party.

Dec 18, 2011 9:41am EST  --  Report as abuse
bondcliff wrote:
What a surprise, The Republicans have been playing this game for the last two years. The simple facts are, that the GOP has one goal and only one goal, and that is to win the White House for their corporate backers. Anything for the middle class is just not on their agenda. I remember when Bush II took over and the GOP proclaimed that the Democrats should work in a spirit of cooperation after the acrimonious eight years of the Clinton years. That the American People where tired of there fighting. But now that a Democrat is in the White House? I as an Independent voter am disgusted at the GOP’s attitude towards governing, just as I was when they wasted time going after Clinton. They are burying any sane ideas they may have under a mountain of B…S…and the only shovel that will remove it is the vote to remove them from office.

Dec 18, 2011 10:34am EST  --  Report as abuse
Gall0wz wrote:
What a bunch of bull. Both sides are the same. They both serve their corporate sponsors. They are both 2 heads that sit atop the same beast. Republican and Democrats have done a fine FINE job of dividing and conquering the American people. That way they keep their stranglehold upon the government so that it continues to pass corporate written legislation.

They don’t even know what they are talking about. Like the SOPA videos of these congressmen sitting around and arguing about stuff they don’t even understand.

And the NDAA they passed that allows them to accuse any american of suspected terrorist activities and detain them indefinitely. No trial, no investigation, no due process of law… no habeas corpus…. just “you’re a suspect and here is your eternal jail cell”….

More tax entitlements to give companies, like Exxon and GE who paid zero taxes, actual tax dollars. Here you go… free money to add to you record levels of cash.

All the while they reduce their domestic workforce and increase hiring overseas… while sitting on record profits they claim they cannot hire people.

And giants like walmart move into a town and kill all the smaller businesses while they peddle their cheap garbage that was created in the People’s Republic of Lead Taint. (china).

No big deal… take your tax entitlements. Build a giant store with 30 registers and only hire enough people to work MAYBE 10 of those registers.

And then we will target veterans benefits (ty michelle bachmann)… and social security… and unemployment for cuts… while never explaining why tax entitlements were never paid for on top of a 4 trillion dollar war. No no… do not blame ourselves… blame the poor. The working poor even. That slave away 6+ days a week for no benefits or a joke of a benefit at slave wages that force them to choose between rent or groceries.

Spend millions to investigate Barry Bonds so we can give him house arrest… instead of putting that money into roads… the electrical grid… or schools.

We blow money on tax breaks for companies that ship jobs overseas. We blow money on aid to countries that hide terrorists who killed our people. We blow money on subsidies that kill small farmers who provide many jobs in favor of giant automated corporate farms that provide food that is tainted with salmonella, listeria, e-coli, and covered in sickening pesticides.

We spend money to push corn so hard that every nasty dirt food has High Fructose Corn Syrup then complain about obesity and blow money on paying for health problems associated with it such as diabetes, heart disease, and cancer.

We spend money propping up beef corporations that force their cattle to stand in knee high manure. We force the to eat corn and animal parts so that prions like the ones that cause mad cow are tainted into the meat. The hormones we pump into them we then ingest and cause breast cancer, obesity, early puberty, and many other ailments.

And all the while the donkeys and the elephants are slapping each other on the back, laughing, while they throw out debates of gay marriage, abortion, and healthcare. Americans get all riled up over these topics that REALLY DON’T MATTER in the end.

Our infrastructure crumbles, our government loses its revenue to corporate tax entitlements and calls for the end to our social programs that we as a people agreed to have. And then the tax entitlements go to the fat corporations that sit atop record piles of money so that the gamblers on wall street can make a buck and be happy.

The machine is broken… and it spews out the black filth that we each toil in in order to feast upon it and gut load ourselves to be devoured and regurgitated by the giant gears of the massive beast this country has become. A beast, once loved by the world, now hated for it arrogance, blindness, and recklessness.

Dec 18, 2011 11:19am EST  --  Report as abuse
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