Obama and Boehner Increase Pressure Over U.S. Payroll Tax Cut
December 22, 2011, 2:14 PM ESTBy Steven Sloan and Laura Litvan
Dec. 22 (Bloomberg) -- President Barack Obama and House Speaker John Boehner are ratcheting up their conflict over extending a U.S. payroll tax cut due to expire in nine days.
Boehner, an Ohio Republican, telephoned Obama today to again press for a one-year extension to the two-percentage-point tax cut, while the president and congressional Democrats insisted that the House first pass a two-month measure that cleared the Senate on Dec. 17.
Obama said today that a “faction of House Republicans” is blocking the measure and that he is doing all he can to resolve the impasse.
“How can we not get that done?” he 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?”
The Republican leader in the Senate, Mitch McConnell of Kentucky, weakened Boehner’s hand today 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 earlier today dismissed criticism from fellow Republicans that he should accept a two-month extension of the expiring payroll tax cut to avert political damage to his party.
“Politics will be politics,” Boehner told reporters at a news conference. “If you do the right thing for the right reasons, then the right things will happen. Everybody’s already agreed that the best policy is a one-year extension.”
Republican Pressure
Republican Senators Richard Lugar of Indiana, Olympia Snowe of Maine, Scott Brown of Massachusetts and John McCain of Arizona have called on Boehner to accept the Senate’s two-month bipartisan deal. Former House Speaker Newt Gingrich, who is seeking the 2012 Republican presidential nomination, warned yesterday that Republicans could be blamed if the tax cut expires.
Boehner’s comments were an attempt to regain ground after Democrats have spent the past several days warning that average middle-income workers could lose about $40 from each paycheck if the tax cut expires. The Ohio Republican told reporters that the two-month extension is unworkable because most businesses file their taxes on a quarterly basis.
“Trying to figure out what your obligation is is going to be difficult” with a two-month extension, Boehner said.
‘Only Viable Option’
In the phone call today, Boehner encouraged Obama to send members of the White House economic team to Capitol Hill to help lawmakers come to an agreement on a one-year extension, according to an aide to Boehner. Obama repeated to Boehner that he views the Senate version of the legislation as “the only viable option currently on the table,” the White House press office said.
One potential path forward is to extend the payroll tax cut for three months to coincide with the business tax filing deadlines that Boehner mentioned. House Ways and Means Committee Chairman Dave Camp raised that possibility today.
“If we can’t do a year, we should at least do a quarter,” Camp said in an interview on CNBC this morning.
Boehner wouldn’t comment on that possibility in the news conference and instead said that Senate Majority Leader Harry Reid, a Nevada Democrat, should appoint negotiators to work out a solution with the House. Michelle Dimarob, a spokeswoman for Camp, later said the Michigan Republican was “offering an example of why the Senate bill does not work, which is what we are hearing from employers all across the country.”
Pelosi Letter
Meanwhile, House Democratic leader Nancy Pelosi of California sent a letter to Boehner pressing him to hold a vote on the Senate-passed two-month extension.
“There is no reason why such an extension cannot be on the president’s desk within a few hours of House action given the overwhelming support the Senate has already demonstrated,” Pelosi wrote.
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. If a deal isn’t reached, emergency unemployment benefits are also set to expire on Dec. 31 and doctors who are reimbursed through Medicare will receive lower payments starting in January.
A survey suggests that House Republicans’ public image has weakened as Obama’s political position improves.
Greater Confidence
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 edge on that question. The share of people who view the Republican Party unfavorably grew to 52 percent from 45 percent in June, according to the poll.
House leaders “have to back down,” Tom Mann, a congressional scholar with the Brookings Institution, a policy center in Washington, said yesterday. “There’s no real possibility of cutting a deal on a one-year extension before the end of the year. It’s foolish to think otherwise.”
Lawmakers in both parties say they want to extend the tax cut through next year while disagreeing over how to pay for it. Senate Democrats sought a surtax on millionaires, while House Republicans voted for such measures as freezing the pay of federal civilian workers.
The Senate-passed bill is H.R. 3630.
--Editors: Jodi Schneider, Laurie Asseo
To contact the reporters on this story: Steven Sloan in Washington at ssloan7@bloomberg.net; Laura Litvan in Washington at llitvan@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
