Tags: Boehner | pipeline | payroll | tax

Lawmakers Wrangle Over Extending Payroll Tax Cut

Friday, 16 Dec 2011 12:11 PM

 

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WASHINGTON — Republican and Democratic negotiators struggled on Friday to agree to a deal on payroll tax relief for 160 million Americans after a roller-coaster week of brinkmanship again laid bare the partisan divide that has gridlocked Congress all year.

The talks on extending the $120 billion payroll tax cut for another year followed a separate deal that bickering lawmakers reached on Thursday night to keep the U.S. government running to September 2012.

After a week of partisan wrangling, the driving force behind the 11th hour spending deal appeared to be fears among party leaders of a voter backlash in the 2012 presidential and congressional elections. Congress's approval ratings are already at record lows.

But both sides remained at loggerheads on Friday over how to pay for the payroll tax cut. The White House and some economists warn that still-tepid economic growth could weaken further if it is not renewed.

House Speaker John Boehner swatted down a Democratic proposal for just a two-month extension to allow more time for negotiations.

Boehner said that, if the Senate passed the stopgap measure, the Republican-led House would insert a provision to accelerate a decision on the proposed Keystone XL pipeline that would transport oil from Canada to refineries on the U.S. Gulf coast.

President Barack Obama has delayed a decision on the pipeline until 2013 and called for further environmental studies. Environmental groups, a core constituency, strongly oppose the project. Obama has already threatened to veto any bill that links Keystone to the payroll tax cut.

"If that bill comes over to us, we will make changes to it, and I will guarantee you that the Keystone pipeline will be in there when it goes back to the United States Senate," Boehner told reporters on Friday.

Boehner's tough line will help strengthen Senate Republican Leader Mitch McConnell's hand in negotiation with Senate Democratic Leader Harry Reid.

A two-month extension would mean both parties having to renegotiate it during the 2012 primary season, when partisan election rhetoric could complicate the search for a deal.

Some economists also say that a short-term extension would not provide the needed economic stimulus if workers, uncertain about the prospects for a longer-term deal, choose to save the money rather than spend it.

"Our goal is to get the full one-year extension now," a senior Democratic aide said, stressing that the two-month proposal is a fallback option. "We don't want to fight this battle all over again next year."

"We are making progress. We feel there is a real shot at a big deal," the aide added.

A senior Republican aide was less forthcoming. "I won't characterize the state of talks as going good or bad. They are continuing. We will see what happens."

Friday's negotiations were also focused on extending long-term unemployment benefits for millions of Americans and preventing a pay cut for doctors treating patients under the Medicare healthcare program for the elderly.

The House this afternoon voted to pass the $1 trillion government funding bill. The 296-121 vote to approve the measure represented a rare moment of bipartisanship in a polarized Capitol. The vote sends the measure to the Senate, which was expected to pass it on Saturday.

The legislative text, some of it including hand-written notes, is 1,209 pages. One would have to read about 50 pages an hour to wade through the text in the 24 hours that the legislation will have been posted before the vote.

However, there is a 15-page summary of the legislation, which is probably what most lawmakers will read.

Reid and McConnell said the Obama administration has assured Congress that only one of its chambers — the House or Senate — needed to pass the spending bill by Friday's midnight deadline to avert a government shutdown.

The other chamber would then be given 24 hours to concur, which the Senate is expected to do, clearing the way for Obama to sign it into law.


© 2014 Thomson/Reuters. All rights reserved.

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