Payroll Tax Cut Bill: House Rejects Senate Extension

WASHINGTON -- House Republicans on Tuesday rejected a Senate bill that would have prevented a payroll tax cut from expiring on New Year's Day, saying they wanted a year-long extension or no extension at all.

House Republicans accomplished that with a convoluted motion to reject a Senate compromise that would have extended the 2 percent payroll tax break for two months, voting 229 to 193 to send the measure to a conference committee.

Seven Republicans voted with Democrats, and no Democrats crossed the aisle. They were Reps. Charles Bass (R-N.H.), Jeff Flake (R-Ariz.), Chris Gibson (R-N.Y.), Jaime Herrera Beutler (R-Wash.), Tim Johnson (R-Ill.), Walter Jones (R-N.C.) and Frank Wolf (R-Va.).

Senate leaders also were hoping for a year-long deal, but sources told The Huffington Post that Republicans and Democrats could not agree on how to fund about half of the $200 billion needed to pay for the bill for a full year. The measure would also extend unemployment insurance benefits and would prevent a 27 percent cut to Medicare payments to doctors with a "doc fix" provision. Those also expire Jan. 1.

So instead, the Senate voted 89 to 10 on Saturday for a two-month extension to buy time to bridge the gap. The upper chamber then recessed, apparently confident that Senate Minority Leader Mitch McConnell (R-Ky.) had the go ahead from House Speaker John Boehner (R-Ohio) to cut a deal.

But Boehner's members rebelled against the bill, even with 39 Senate Republicans backing it, and scrambled to oppose it. At first, the GOP had set a vote on the bill, but late Monday changed it to an unusual motion to reject the Senate compromise. If they had held the first vote, and it had passed, the bill would have gone straight to President Obama.

But under the new version, House leaders accomplished their goal of sending the bill to a conference committee instead, even though Senate and House Democratic leaders insist they will not appoint members to the committee.

Democrats argued that the parliamentary gymnastics were just a way to prevent a clear vote on a bill that they believe would pass.

"The Republican majority in this House of Representatives is refusing -- it is refusing to allow a vote in this House on the Senate bipartisan compromise," said Rep. Chris Van Hollen (D-Md.). "What are they so afraid of? It is very clear that the Republican leadership is afraid that the same bipartisanship that took place in the Senate will take place right here in the House... otherwise we'd have a vote on it."

Republican leaders insisted they were preventing a vote to pass the Senate deal because approving a bill for just two months creates uncertainty. They cited a payroll business trade organization that said a two-month extension is problematic for electronically processed payrolls.

And they contended that the sides were "90 percent" of the way to a deal, even though $100 billion separated the GOP and Democrats in the Senate. The original version of the House bill also adds a string of "poison pill" riders on top of the differences over funding. Democrats initially wanted to tax the rich to pay for the bill, but dropped that surtax in the compromise.

"We need to come together in a responsible manner to find common ground," said House Majority Leader Eric Cantor (R-Va.).

Cantor and others argued that the Senate had only been interested in going on vacation.

"We stand ready to work over the holidays to get this done," said Rep. Jeb Hensarling (R-Texas). "That's the question, are you willing to work over the holidays, or are you not willing to work over the holidays," Hensarling said, suggesting that Democrats need to watch Schoolhouse Rock to figure out how Congress' conference committees work.

Democrats didn't buy it, and none budged to the GOP side, even though at least a handful usually do.

"If you're so sure of your argument, why not vote on the Senate bill?" asked Rep, Sander Levin (D-Mich.), the top Democrat on the Ways and Means Committee. "Because everything you said is a smokescreen," he said.

The House could still hold a separate vote directly on the Senate bill if GOP leaders relent.

However, they seemed intent on trying to make the president or Democratic leaders blink on their position, and restart negotiations.

Democrats insisted they would not budge, leaving the Senate bill as the only standing proposal.

"It is unconscionable that Speaker Boehner is blocking a bipartisan compromise that would protect middle-class families from the tax hike looming on January 1st - a compromise that Senator McConnell and I negotiated at Speaker Boehner's own request," Senate Majority Leader Harry Reid (D-Nev.) said in a statement just after the vote.

"I would implore Speaker Boehner to listen to the sensible Senate Republicans and courageous House Republicans who are calling on him take the responsible path, and pass the Senate's bipartisan compromise," Reid added. "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."

President Obama stood by the Senate's position, speaking from the White House soon after the vote.

"Let's be clear: Right now the bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on Jan. 1. It's the only one," Obama said, arguing that the Senate put aside disagreements on the remaining issues and "went ahead and did the right thing."

"I need the speaker and House Republicans to do the same. Put politics aside, put aside issues where there are fundamental disagreements, and come together on something we agree on. And let's not play brinksmanship. The American people are weary of it."

Moments after Obama spoke, Boehner said no, adding that Obama should call the Senate back in.

"I need the president to help out," Boehner said, when informed that the president had asked for his assistance. "Our House GOP negotiators are here and are ready to work," he added. "Now it's up to the president to show real leadership."

"We have done our job," Boehner said, and named conferees to the as-yet uncalled conference.

To tell Congress how you feel about the bill, weigh in via PopVox.com

Nine Poison Pills In The GOP Payroll Tax Extension Bill:

Comments

[l78lancer]

06:20 PM on 12/21/2011

"Seven Republicans voted with Democrats, and no Democrats crossed the aisle."
---------------------------------------------------->

Only seven House republicans recognized it was time to stop holding this measure hostage.

That is pathetic.

[Florian EngageAmerica]

04:39 PM on 12/21/2011

It comes as little surprise that the tax cut was not extended any further. As the Republicans position has made itself clear, raising taxes on anyone will not be accepted. The biggest problem with this issue has been not the tax itself but the lack of a forward thinking plan in terms of the recovery. one of the problems that came with a payroll tax extension was how it would affect the wealthy. Now of course it only affects small apportion for the population but you do have to ask what the effect of a raised tax on one class of people is over time? One of the effects is that it can make those who have to pay the tax a little less willing to take risks in other financial/ economic endeavors such as reinvestment in business and perhaps even expansion of companies (http://eng.am/tCBrc9). A long term plan is going to be needed from both sides if we are going to make any sort of headway on an economic recovery.

[tug33]

02:42 PM on 12/21/2011

the 5000 wealthiest people in the usa earned in 2010 an average 140 million thats average gee lets not tax them a little more they will have to cut the helps pay to below minimum 200 a week

[hsmachine]

02:14 PM on 12/21/2011

2 months is not long enough.

[louisheli]

01:45 PM on 12/21/2011

We need to get them all out. They(the establishment multi term people up there are working together against us. Go to G.O.O.O.H .to see how we can do this.

[beemerboxer]

01:14 PM on 12/21/2011

Obviously Boehner and his Tea Party neo cons are becoming a clear and present liability to the wellbeing of the American people. The GOP needs to clean house if it ever wants to regain the confidence of the electorate; the House partisanship is destroying what was once the Grand Old Party. If President Obama fails to be re-elected, the future for all of us is bleak unless you happen to be in the one percent brigade for whom the GOP is the current handmaiden.

[SharonDoc]

01:05 PM on 12/21/2011

The President and the Senate should do what they did w the healthcare bill and bypass the constitution and not have a vote in the House and just pass it!

[obiwan49]

12:54 PM on 12/21/2011

It is now crystal clear that the GOP never intended to give a tax break to the middle class.

[Jessica Law]

01:29 PM on 12/23/2011

yep.

[Michael D OBrien]

11:50 AM on 12/21/2011

Mr. Speaker, we have President George H.W. Bush on the line. He says,'those who do not learn from history, are DOOMED to repeat it!'

Merry Christmas Mr. Speaker, Bush '92!

[Celeste5793]

11:25 AM on 12/21/2011

Earth to the republican party. Dump the tea party overboard.

[aearthling59]

11:25 AM on 12/21/2011

President Obama will get a chance to sign into law a portion of his $447 billion jobs plan after the House agreed Wednesday to extend tax credits to businesses that hire unemployed veterans and to repeal a tax provision seen as a potential burden to government contractors.

This is the first element of Obama’s jobs package to get Congressional approval. The measure, approved last week by the Senate, passed 422 to 0. It heads to Obama, who Wednesday said he would sign the bill. Both parties cheered the vote as a rare example of legislative cooperation. But the bipartisan spirit was limited.

[aearthling59]

11:19 AM on 12/21/2011

The House passed 28 jobs bills that have been sitting in the Senate. The Senate went home for the holidays and won't be back til the 23rd of January. They should have passed the bills and the problems would have taken care of themselves. The Senate, under Reid, has played fast and furious with the workers of America. Perhaps these unemployed should be waiting for them in DC when they return and ask why 70% of all foreign goods now enter duty free. They should ask why have we lost $3.5 trillion in duty revenue in the last ten years due to trade deals. Unemployed? Just don't sit there.

[l78lancer]

06:37 PM on 12/21/2011

Very clever crafted. But inferring that Reid is at fault for the problems that have taken root over at least the last ten years (as YOU have indicated) is specious.

Besides, trade and tariffs (technically) fall under the president, and what you describe was an advent under a previous administration beginning with their initial reticence to deal with tariff issues with China in 02-03.

[DeceptionIsReality]

11:04 AM on 12/21/2011

I watch Fix news from time to time to see what they are spinning. Evidently, it's all the democrats fault. They don't want to get to work. LOL. It's surreal house republicans get a bunch of riders in the compromised bill, agree to pass it, and then decide not to. Republican party=clowns.

[MikeB tx]

10:44 AM on 12/21/2011

I sure wish I had a job that no matter how incompetent I was, it would be a matter of YEARS before I would get fired (voted out).

This sort of thing was going to happen, simply based on the previous history of events.
Just how much is this going to hurt health care (remember that part of this is the "Doc fix"). I have seen postings in doctors' offices that they do NOT accept Medicare/Medicaid payments. How many more will be added?

Is there just a hint of arrogance on the part of the Senate Democrats leaving before business was finished? How about refusing to return to finish business? (And there are more than 10 Republicans as well.)

Maybe this is just a job creation ploy in disguise? After all, how much work is involved now in suddenly implementing all the changes, and potentially changing things again shortly after...

[l78lancer]

06:58 PM on 12/21/2011

???

It would not have hurt Healthcare Reform.

This whole thing was about:
1. the republicans refusing the 1% tax on the rich,
2. rolling back regulations and hand cuffing the EPA with XL.

It was already proven by the GAO that XL would NOT produce 20000 jobs. Period. That number was bogus but the republicans kept pusing it. XL was about rolling back regulations, not about job creation. and with the Economy producing 100000-200000 per month XL may have been needed but not critical until the environmental issues were worked out.

How short is your memory? Reid said for the entire previous week that they were willing to work through Christmas. The problem didn't occur until McConnell was able to strike a deal with Reid, making Boehner and Cantor feel like McConnell stabbed them in the back. The fact is that the house never intended to strike a deal, and they were exposed by their republican senate colleagues who understood that they were in a bad and weak position.

Have you noticed the silence from DeMint and the other so-called TP senators? How about the response from Brown that blasted Boehner and Cantor, but who just had his chances for reelection pretty much trashed because ot this stunt by the House?

Reality check time. Put the blame where it belongs - on Boehner and Cantor.

[flabrija63]

10:25 AM on 12/21/2011

"Let's be clear: Right now the bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on Jan. 1"

It's not a tax HIKE you clown. First of all it's not even a tax, it's SS witholding and we are purposely underfunding SS by doing so. All this damage being done so that the average person gets another 10 bucks a week in their check. Pretty pathetic. But then, according to him, that 10 bucks will create thousands of job. Yeah, right.
3 gallons of gas, or a 6 pack of beer, maybe a pack of smokes or a dinner for two off the dollar menu.......