Tags: House | Republicans | Payroll | Tax | Cut

House Republicans Agree to End Payroll Tax Cut Deadlock

Thursday, 22 Dec 2011 06:42 PM

House Speaker John Boehner agreed on a plan to extend a U.S. payroll-tax cut past its Dec. 31 expiration, backing down under pressure from Senate Republicans and President Barack Obama.

The agreement capped five days of wrangling triggered by a revolt by House Republicans over a two-month bipartisan deal reached in the Senate and passed Dec. 17 in an 89-10 vote. Amid polling that showed Republicans losing ground during the standoff, Obama and Senate Republicans ratcheted up pressure on Boehner to bring his caucus to agreement.

Boehner said at a news conference in Washington his members decided to “do the right thing for the American people even if it’s not exactly what we want.”

The House and the Senate will approve the deal by unanimous consent before Dec. 25, according to a statement issued by Boehner, which means that most lawmakers won’t have to return to Washington.

Obama congratulated members of Congress for ending the partisan stalemate, saying the agreement meets the test of preventing a tax increase for 160 million workers.

“This is the right thing to do to strengthen our families, grow our economy and create new jobs,” the president said in an e-mailed statement. He also thanked Americans who “raised your voice to remind folks in this town what this debate was all about.”

Conference Committee

Senate Majority Leader Harry Reid agreed to appoint negotiators who will work with House lawmakers on a deal to extend the two-percentage-point payroll tax cut through 2012.

Boehner had found himself increasingly isolated today as Obama continued to insist on a two-month stopgap agreement and Senate Republican leader Mitch McConnell said the speaker should accept the Senate’s short-term plan.

Boehner, an Ohio Republican, telephoned Obama earlier to again press for a one-year extension.

Obama said earlier today a “faction of House Republicans” was blocking the measure and that he was doing all he could to resolve the impasse.

“How can we not get that done?” the president said at an event on the White House grounds. “I mean, has this place become so dysfunctional that even when people agree to things, we can’t do it?”

Weakened Hand

McConnell, of Kentucky, weakened Boehner’s hand by calling on the House Republican leader to pass a short-term bill by year’s end so Congress could return to talks over the tax cut, an oil pipeline and other matters in the Senate measure.

“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.”

Boehner told reporters earlier today that the two-month extension was unworkable because most businesses file their taxes quarterly. Later, he said the agreement will include language to protect small businesses from tax reporting requirements in the Senate measure.

Republican Senators Richard Lugar of Indiana, Olympia Snowe of Maine, Scott Brown of Massachusetts and John McCain of Arizona had called on Boehner to accept the Senate’s two-month bipartisan deal.

Unless Congress acts, the payroll tax for employees will rise to 6.2 percent from the current 4.2 percent in January. The payroll tax funds Social Security. Emergency unemployment benefits are also set to expire on Dec. 31 and doctors who are reimbursed through Medicare would receive lower payments starting in January.

A survey suggests that House Republicans’ public image has weakened as Obama’s political position improves.

A CNN poll taken Dec. 16-18 found that, by 50 percent to 31 percent, respondents said they had more confidence in Obama than in congressional Republicans to deal with the major issues facing the country. A March survey gave Obama a 44 percent to 39 percent.

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