CQ TODAY ONLINE NEWS
Dec. 7, 2011 – 10:54 p.m.
No End in Sight for Payroll Tax Cut Deadlock
By Sam Goldfarb and Richard E. Cohen, CQ Staff
The debate over how to extend programs that are set to expire at the end of the month, including a payroll tax cut and jobless benefits, is sure to continue well into next week with little sign of resolution.
Senate Democratic leaders vowed Wednesday to work through the coming holidays, if necessary, to preserve the Social Security payroll tax cut for workers that has been in effect since January. “We will stay here to Christmas and even to New Year’s to get it done,” said
At the same time, Republican leaders issued a notice to rank-and-file lawmakers that the House is likely to be in session past its expected adjournment date of Dec. 16, including possible work that weekend.
With little time left to reach a deal, House and Senate leaders broadly agree that Congress should continue programs that are aimed at helping workers and the long-term unemployed make ends meet in a difficult economy. What remains to be decided is how to finance the cost of these programs or whether to pay for them at all.
The impasse has escalated to a high-visibility political contest. And in a fairly predictable move, President Obama made clear Wednesday that he would delay his annual trip to his home state of Hawaii unless House and Senate leaders resolve their differences soon. “He intends to hold Congress accountable,” said Valarie Jarrett, a senior adviser to Obama, in an interview with MSNBC.
Despite the lure of a monthlong winter recess, negotiations between party leaders have slowed recently as the two sides each say they await a move by the other. That portends more political posturing Thursday and maybe into next week.
Democrats say they want Republicans, and particularly Speaker
Multiple Senate Votes
To date, the Senate has considered three different bills that would extend the payroll tax cut, and the chamber is expected to vote again Thursday evening.
Senate Republicans have thwarted each of the Democrats’ efforts to extend and expand the payroll tax cut in part because Democrats have tried to pay for the renewed break by raising taxes on households with incomes over $1 million.
The latest Democratic proposal (
While Senate Democrats keep pushing — unsuccessfully — for their slightly revised proposals, Senate Republicans have had as much or more difficulty winning support for their ideas.
Several GOP senators said Wednesday that Minority Leader
No End in Sight for Payroll Tax Cut Deadlock
The plan would provide an opportunity for senators to vote on side-by-side cloture votes on competing measures.
Both motions are likely to be rejected, however, and so it is unclear how this gambit might advance the negotiations.
When it came to a vote last week, the GOP plan had the support of less than half of the Republicans in the chamber.
Battling Over Offsets
Reid showed a potential opening for compromise Wednesday when he said Democrats might accept an extension of the payroll tax cut that is offset exclusively by spending cuts. But he drew the line at further reducing the overall level of annual appropriations, noting that Congress reached a 10-year agreement on discretionary spending caps when it raised the federal debt limit in August (PL 112-25).
By contrast, Republicans remain interested in limiting discretionary spending by extending the current pay freeze for federal employees beyond 2012 and curtailing federal hiring.
With Democrats opposed to discretionary spending cuts and Republicans united against tax increases, House and Senate negotiators are taking a close look at other areas of the federal budget as they search for potential offsets.
That search is not proving easy, however. Frustrating Democrats, Republicans oppose counting savings from reduced war spending because those savings are already expected as the United States reduces its presence in Iraq and Afghanistan.
“It becomes difficult,” said
Renewing the payroll tax cut for 12 months is expected to cost about $120 billion in foregone revenue over 10 years. Many lawmakers also want to continue jobless benefits for the long-term unemployed and prevent cuts in Medicare reimbursements to doctors, which together might cost an additional $90 billion.
Republicans Make Progress
As they prepare for a closed-door decision-making meeting Thursday, House Republicans say they are making progress in their discussions over extending the payroll tax cut and other year-end matters. And they are making tentative plans for the House to take up a year-end measure that would include the tax cut by the middle of next week, although some details have not been settled, notably how to offset the cost.
GOP lawmakers do appear to have reached agreement on several broad goals. Those include protecting Social Security benefits from the effects of the payroll tax cut, avoiding other tax increases, changing the unemployment program and assuring that the package does not add to the deficit.
No End in Sight for Payroll Tax Cut Deadlock
And Republicans have made progress in resolving some internal divisions that came to the fore during a Dec. 2 caucus meeting.
Boehner said after a Wednesday morning meeting of House Republicans that discussions of options have continued with “a lot of debate on how best to do this.”
“We are getting to the endgame,” said Rep.
To appeal to skeptical lawmakers, House GOP leaders are likely to incorporate pieces of the party’s energy agenda in the package, including a delay in a new pollution standard for industrial boilers and a removal of barriers to construction on the Keystone XL pipeline.
Obama firmly opposed addressing the pipeline fight in this measure. “My warning is not just specific to Keystone,” Obama told reporters at the White House. “Efforts to tie a whole bunch of other issues to something that they should be doing anyway will be rejected by me.”
But Republicans say they are standing firm. “If President Obama threatens to veto it over a provision that creates American jobs, that’s a fight we’re ready to have,” Boehner spokesman Michael Steel said.
Alan K. Ota and John D. Boyd contributed to this story.