CQ TODAY ONLINE NEWS
Feb. 13, 2012 – 11:44 p.m.
House GOP Drops Offsets From Payroll Tax Talks
By Richard E. Cohen and Alan K. Ota, CQ Staff Writers
House Republican leaders called on Monday for extending the Social Security payroll tax cut for the rest of the year without offsetting its cost, a significant pivot that could telegraph the majority’s posture in upcoming battles over extending expiring tax breaks later this year.
The proposal that Speaker
It also represents a major reversal for Republicans, who had recently insisted that the cost of extending the tax cut had to be offset with spending or program cuts to keep the measure from adding to the budget deficit.
The move returns the majority to its position that tax cuts do not have to be offset, a posture it took when it assumed control of the House last year. It could signal that Republicans are searching for flexibility in the upcoming fight to continue the 2001 and 2003 tax cuts (PL 107-16, PL 108-27) without offsetting their cost later this year.
Republican leaders said their proposal still has to be vetted during a closed-door meeting with the rank and file. The leaders left themselves room to reverse course, saying they would only propose separate legislation to extend the Social Security payroll tax cut after a “conversation with our members.”
Boehner, Majority Leader
A House-Senate conference committee is currently negotiating how to extend the payroll tax cut as part of a larger package (
Last December, Congress extended those programs for two months (PL 112-78), but only after House Republican leaders were forced to retreat on the issue.
Democrats’ Concerns
Many top House Democrats voiced objections to breaking up the payroll bill, a move that could greatly weaken their leverage in resisting Republican proposals to make changes to the long-term unemployment benefits program and Medicare in exchange for renewing the payroll tax cut.
“The Republican plan to decouple the payroll tax jeopardizes both the ability of seniors to see their Medicare doctors and benefits for millions of Americans who lost their jobs,” said Minority Leader
Senate Majority Leader
Reid and Baucus conferred just off the Senate floor late Monday but later declined to say how Senate Democrats would respond to the House GOP proposal not to offset the cost of extending the payroll tax cut.
House GOP Drops Offsets From Payroll Tax Talks
Several senior Democrats said Reid was sure to reject the House proposal because it would leave unresolved how to pay for extending unemployment benefits or for averting the scheduled decrease in reimbursement rates for Medicare physicians.
“We won’t accept it as it is,” said Sen.
Still, some Democrats conceded that some members of their party could find the plan attractive. “I suspect that it will be a tempting offer for us,” said Sen.
Senate GOP on the Fence
Senate Republicans have not decided whether they will back the House proposal or cut a deal with Democrats, as they did last December with resulting House GOP turmoil.
Minority Whip
Still, Cornyn acknowledged that the issue has not been a winning one for his party and has given President Obama his biggest stick with which “to beat up Republicans.”
“We should take it off the table and move on to other important things,” Cornyn said. “Sometimes . . . in order to win the war, you need to have a tactical retreat.”
The emergence of the proposal in the House could deflect, or even delay, attention from a bruising internal GOP fight over a transportation bill (
House Republican leaders floated their proposal mindful that the issue has been politically damaging for their party amid what one senior House Democratic aide called “ongoing hand-wringing on getting their members to support this tax cut.”
Some House Republican aides described the proposal as “a backup option” designed to pressure Senate Democrats to “negotiate in good faith.” But the proposal could prove so popular that lawmakers will gladly defer the other issues — for this week, at least.
Still, there is no guarantee that GOP leaders will win the backing of their rank and file, particularly conservatives, because many have long voiced doubts that the tax cut will create jobs. Other conservatives have been openly hostile to extending the payroll tax cut, raising concerns that a reduction in tax receipts amounts to a “raid on the Social Security trust fund.” Any shortfall in Social Security tax receipts is fully replenished by the Treasury.
Approval of the payroll tax cut extension as a stand-alone bill would leave House-Senate conferees to resolve the central question of how to pay for the remaining issues in the payroll tax package.
House GOP Drops Offsets From Payroll Tax Talks
House Republicans have been pushing to reduce the maximum weeks of unemployment coverage and to add requirements that unemployment beneficiaries be subjected to drug tests and required to seek the equivalent of a General Educational Development credential.
Sam Goldfarb and Ben Weyl contributed to this story.