12/22/2011 11:22 am ET Updated Feb 21, 2012

Payroll Tax Cut Fight: Mitch McConnell Says House Should Pass Two-Month Extension (UPDATE)

WASHINGTON -- Moments after House Republican leaders dug in their heels on blocking a two-month extension of the payroll tax cut, Senate Minority Leader Mitch McConnell offered his colleagues a path out of the politically damaging position.

Last week the Senate overwhelmingly passed a two-month extension of the 2 percent break, which expires New Year's Day. But House GOP leaders rejected that deal, saying they would only accept a yearlong extension, even though many in their own party have been highly critical of the opposition.

So McConnell (R-Ky.), who negotiated the Senate deal, offered a new idea Thursday, suggesting that Senate Majority Leader Harry Reid (D-Nev.) appoint members to a conference committee to work out a longer deal between the two chambers in return for the House passing the two-month stopgap now.

"House Republicans sensibly want greater certainty about the duration of these provisions, while Senate Democrats want more time to negotiate the terms," McConnell said in a statement. "These goals are not mutually exclusive. We can and should do both."

"Leader Reid should appoint conferees on the long-term bill and the House should pass an extension that locks in the thousands of Keystone XL pipeline jobs, prevents any disruption in the payroll tax holiday or other expiring provisions, and allows Congress to work on a solution for the longer extensions," McConnell continued.

The Senate bill includes a provision demanding that President Barack Obama make a decision on the controversial oil pipeline from Canada to Texas within 60 days. It also extends unemployment benefits and higher Medicare reimbursement rates for doctors, which expire Jan. 1.

Just before McConnell released his suggestion and despite the political pressure mounting on the GOP, House Speaker John Boehner (R-Ohio) and several other Republican leaders insisted that the only path was for Democrats to come back to the Hill and negotiate a new, yearlong bill in a conference committee.

"Sometimes it's hard to do the right thing," Boehner told reporters Thursday.

An aide to Boehner said the speaker had talked to the president earlier and reiterated his insistence on the longer extension.

"The speaker proposed that the president send members of his economic policy team up to Congress to find a way to accommodate the president's full-year request," the aide said. "The speaker explained his concern that flaws in the Senate-passed bill will be unworkable for many small business job creators. He reiterated that if their shared goal is a one-year bill, there is no reason an agreement cannot be reached before year's end. The president declined the speaker's offer."

Boehner's office did not immediately react to McConnell's proposal.

Reid responded by essentially repeating the Democratic position that his side has sought a longer-term bill all along and that he will continue to seek that -- once workers, the unemployed and those who rely on Medicare are protected in the short run.

"Once the House passes the Senate's bipartisan compromise to hold middle class families harmless while we work out our differences, I will be happy to restart the negotiating process to forge a year-long extension," Reid said in a statement. "Now, it is important that we now hear from Speaker Boehner in light of Senator McConnell's comments."

House Democrats, who were calling on Boehner to relent Thursday, sounded somewhat dubious that the McConnell plan would go anywhere, noting that McConnell had believed he cut a deal last week that the House would pass, only to have the House GOP rebel.

"I don't know whether Senator McConnell can speak on behalf of Speaker Boehner," remarked House Minority Whip Steny Hoyer (D-Md.).

Michael McAuliff covers politics and Congress for The Huffington Post. Talk to him on Facebook.