Republican House Rejects Bipartisan Senate Plan for Payroll Tax Extension and Jobless Benefits (UPDATED)

It continues to be ugly out there — out there, as in Congress. The reason: partisan gridlock. The increasingly likely victims: those who received payroll-tax cuts and unemployment benefits. Middle income Americans. But — hey — it’s great grist f

or the 24/7 partisan wars. Your tax dollars at non-work:

The Republican-led House today rejected a Senate-passed bill that extends a payroll tax cut and unemployment benefits for two months.

The vote was 229-193. The tax cut and unemployment benefits expire on Dec. 31.

“The bottom line is a two-month patch is irresponsible. That’s why the House is taking a stand,” House Majority Leader Eric Cantor, R-Va., said on the floor prior to the vote.
Most voters won’t accept that explanation. To many voters, they’ll read or heard headlines with the bottom line: the staunchest defenders of tax cuts for the wealthy have rejected something that will save them some money. If the GOP gets what it wants on this issue, it might neutralize the damage. But if the cuts and benefits DO expire on December 31 the Democrats have a very strong campaign issue and Republicans may be the victims of a case of massive buyer’s remorse among independent voters who gave them the House in 2010.
If the benefits expire at the end of the year, 160 million Americans will see a tax increase while about 2.2 million long-term unemployed will see their benefits disappear. Medicare payments to physicians also will drop, raising concerns that doctors will limit their care to seniors.

House Republicans voted to move to formal negotiations with the Senate to resolve the differences between their two bills. The House has passed a one-year extension, while the Senate approved over the short-term deal over the weekend.

The move to open formal negotiations is complicated since the Senate already has adjourned for the year. Senate Majority Leader Harry Reid, D-Nev., had expected the House to pass the short-term fix, but House Republicans revolted.

“There’s no reason the House, the Senate and the president cannot spend the next two works working to get (a deal) done,” Cantor said, calling on the Senate to return to Washington.
In effect Cantor is proving to be the Speaker of the House in terms of actual power over votes. And, of course, the White House reaction was expected.
The White House blamed Republicans for the stalemate.

“The shenanigans of the last 48 hours from the House GOP leadership are why 43% of Americans think this is the worst Congress in history,” tweeted White House Communications Director Dan Pfeiffer.

MSNBC’s First Read notes that the GOP is cornered on this issue:

*** Cornered: To understand how House Republicans have backed themselves into a corner on extending the payroll tax cut, two Senate Republicans running in some of the most competitive contests next year are distancing themselves from the House GOP. “The House Republicans’ plan to scuttle the deal to help middle-class families is irresponsible and wrong,” said Sen. Scott Brown (R-MA), who most likely will run against Democrat Elizabeth Warren in 2012. “The refusal to compromise now threatens to increase taxes on hard-working Americans and stop unemployment benefits for those out of work.” And Sen. Dean Heller (R-NV), who will run against Democratic Rep. Shelley Berkley, added: “What is playing out in Washington, D.C., this week is about political leverage, not about what’s good for the American people. Congress can work out a solution without stopping the payroll tax-cut extension for the middle class.” Bottom line: You know where the politics on this issue are when Brown and Heller are for/against something. Two other veteran senators, Richard Lugar and Olympia Snowe, also both up for re-election in states carried by President Obama in ‘08, have joined the chorus of Republicans asking the House GOP to simply vote out the Senate bill.

AND:

*** Boehner on an island: House Republicans aren’t the only ones who have put themselves into a corner; so has House Speaker John Boehner. How did he so badly misread his House GOP conference on this measure? We are pretty confident that there’s no way Senate Minority Leader Mitch McConnell would have left Boehner high and dry on this payroll tax cut — and given that high five — if it was undesirable to Boehner. Boehner’s speakership could be badly damaged from this episode. Is he leading or simply trying to stay in front of the crowd?

Here a European news report summarizing the battle:

UPDATE: The Washington Post:

The House on Tuesday rejected a bipartisan Senate compromise to extend a payroll tax cut for two months, along with unemployment benefits, plunging Washington on the eve of Christmas into uncertainty about the fate of the tax cut enjoyed by 160 million workers.

On a vote of 229 to 193, the House set aside the Senate bill and requested a formal conference with the Senate, setting up a showdown with the Democratic-controlled Senate and President Obama, who has demanded that the House approve the short-term plan now to avoid a Jan. 1 tax hike.

Democrats, who have pushed for the full-year payroll tax cut for months, say Congress should accept the temporary measure now and return in January to solve an impasse over how to extend the cut for the full year.

The Senate deal would also postpone a scheduled cut in reimbursement rates for doctors who treat Medicare patients.

In debate before the procedural votes that shelved the Senate bill, House Minority Leader Nancy Pelosi (D-Calif.) charged that “the extreme tea party element of the Republicans in the House” was blocking an extension of the payroll tax cut and unemployment benefits for millions of Americans.

“They alone are standing in the way of a tax cut for the middle class,” she said.

AND:

The next step to resolving the situation is extremely uncertain. Senate Majority Harry M. Reid (D-Nev.) has charged that the GOP backed out of a deal reached between both parties in the Senate and pledged he will not appoint Senate negotiators to restart talks.

Rank-and-file House members, meanwhile, said there will be little for them to do once the conference committee is appointed and many plan to leave Washington for the holidays. That could potentially undermine the Republican promise to work through Christmas to craft a deal.

Procedurally, the House vote was structured as a motion to reject the Senate’s deal. That meant there was no ability for House members who supported the deal to vote for its adoption.

Democrats charged that Republican were denying the two-month deal an up-or-down vote because they believed it would pass. Republicans said they wanted to let their members vote affirmatively to reject the Senate bill.

The House set its course of action at the raucous, two-hour closed-door meeting Monday night, House Republicans compared themselves to the underdog, principled Scots in the movie “Braveheart” and, over takeout chicken sandwiches, promised to knock down the Senate bill.

Senate Democrats accused House Speaker John A. Boehner (R-Ohio) and his leadership team of walking away from the deal as a capitulation to tea-party elements and said they had no plans to reopen talks. They said that if the House rejects a deal that was adopted in the Senate on an 89 to 10 vote, it would amount to nixing the tax cut.

(Merry Christmas to you all!)

Photo via shutterstock.com

16 Comments

  1. I ask as someone who hasn’t been following this closely (I’ve got holiday plans): what was wrong with the bill that the house passed and the senate apparently rejected? Why aren’t we also blaming the Senate, then?

  2. Once again, the media, in covering the he-said-she-said of politics, neglects to actually tell the public about the substance of the dispute. After reading a few articles I still can’t tell what was the disagreement over the longer-term bill.

  3. adelinesdad:

    For openers, the original House bill contained language that would have forced the president to prematurely approve going forward with the Keystone XL shale oil pipeline from Alaska to Texas, which would be an environmental disaster waiting to happen.

    A myself would have preferred a one-year extension, but the GOP agreement that a two-month extension would be kicking the can down the road is ludicrous considering that both sides have been doing exactly that on fiscal matters.

    As things now stand, on January 1 160 million workers will see a 2-percentage-point increase in the Social Security payroll tax that is deducted from their paychecks, and benefits for 2.2 million of long-term unemployed people will start to expire.

  4. I favor the GOP plan in the House, if we have to extend the payroll tax cut. Personally, I don’t think it should ever have been cut in the first place.

  5. The opposition to the House bill is more than just the pipeline.

    1) The way that they pay for the ‘cut’ is by increasing the amount that wealthy seniors would have to pay for their Medicare stuff. As I understand it, some of the covered costs would have higher deductibles for them. Thus: instead of having all the wealthiest pay for the cut, the bill would have only those wealthy who are retired or disabled do so.

    2) The plan would have cut unemployment benefits from 76 weeks (I think) to 36 weeks–more than half. It would also have made it more difficult to receive unemployment insurance (mandatory enrollment in GED programs, etc)

    3) The plan would have frozen pay for government workers for two years.

    4) The plan would have made other cuts to the new health care law–a law that has not really taken effect yet (in spite of rhetoric to the contrary). Since this is Obama’s signature accomplishment, he would likely veto budget cuts that would compromise the bill.

    Hope this helps clarify things.

  6. Shaun,

    No offense but the Senate and the House bills contained the same provision on the pipeline, requiring the administration to make a decision within two months as opposed to after the next election. Neither bill requires approval of the pipeline.

    Rcoutme:

    1. The Senate bill more or less exempts people collecting SS and Medicare from paying since they tend not to have incomes over a million dollars, that tends to be the province of people working. Furthermore, having wealthy seniors pay more for Medicare is, in my view at least a good idea.

    2. The House bill does not cut weeks of benefits available but changes the eligibility requirements to receive benefits. Yes the requirements are tighter but it is not as you describe it.

    3. The President has already proposed doing this.

    4. Yes the bill does this and yes it would be hard for the President to sign such a bill but that’s hardly an argument as to why the bill is bad.

    AD, the disagreement over the bill was on how to pay for it. The Reps had a grab bag of small spending cuts. The Dems had a millionaire’s tax. Neither side would pass the other’s pay for’s. That’s about the size of it.

  7. Steve, every single description of the House bill sent to the Senate agrees with Shaun. It does cut the number of weeks available to the long term unemployed. Where did you get the idea that it didn’t? In addition, the original House proposal included firing about 250,000 federal workers as well as freezing the pay for two more years than Obama proposed. Yeah, that’s good for unemployment.

  8. Nice to see the above communication as I was all but called an idiot when I said the house passed the bill earlier. Sometimes there is honest debate that can occur without being nasty.

    What I also see is the continuing lack of leadership in all of Washington.

    First, why hasn’t the President asked everyone to come in for a meeting, tell all that will be present to bring to the table those things they can agree on and their party can accept, work out a solution and then break.
    Second, why did Reid allow the Senate to break for the holidays knowing that the house had a history with Boehner getting an agreement, then having the agreement taken back. Seems like this happened during the debt debate in August.
    Third, why is Boehner agreeing to things in meetings with Reid and McConnell that he has not received a clear understanding that his conservative members will agree to. He should know after almost a year that there a certain members that are not going to bend over and accept anything he wants as has been the case in the past with House members just following the leaders like sheep to slaughter.

    Never would you see this happening in a business, other than ones that were going bankrupt. Oh, I just answered my 4 questions. These people would never survive in the real world, so that is why they are running the country. And we vote these idiots on both sides of the isle into office. No one to blame other than ourselves.

  9. Sorry Jim but you must get your news from an interesting source.

    http://abcnews.go.com/blogs/po.....own-looms/

    “This afternoon the House is expected to pass the GOP’s legislation, which the president has threatened to veto. The package extends the payroll tax credit, reforms and extends unemployment insurance, and includes the sustainable growth rate Doc-Fix. Even though the three items are top priorities for President Obama, most Democrats are expected to reject the bill because it includes a provision accelerating the president’s decision whether to move ahead on the Keystone XL Pipeline within 60 days of passage.”

    And here’s the text of the bill should you care to read it.

    http://rules.house.gov/Media/f.....16A85763F9

    Nowhere does it require the President to approve the pipeline. It says that the pipeline will be approved if he makes no decision but, within 60 days, he can reject the pipeline if he determines it to be not in the national interest.

    The proposal also does not propose firing federal workers but having the workforce shrink via attrition. I presume you know those aren’t the same thing.

  10. @RP


    And we vote these idiots on both sides of the isle into office. No one to blame other than ourselves.

    How can someone represent you if they receive financial support from institutions OPPOSING the general interest?

    Real change will be really hard work.
    It will require normal people with normal salaries to run for office. This is a big sacrifice. Real people have lives and families and jobs, etc.

    The idea that any of these people represent me and my interests is a farce. I could nominate myself to run, perhaps, but then I would need campaign staff and travel support, etc.

    Hopefully Internet will kill the Tour Bus star and we can just make low budget youtube clips for our nominations.

    Interwebs to the rescue?

  11. @RP


    And we vote these idiots on both sides of the isle into office. No one to blame other than ourselves.

    How can someone represent you if they receive financial support from institutions OPPOSING the general interest?

    Real change will be really hard work.
    It will require normal people with normal salaries to run for office. This is a big sacrifice. Real people have lives and families and jobs, etc.

    I am hopeful that the Internet star will kill the “Snake Oil Tour Bus” star and we can just make campaign with low budget youtube clips.

    Should that time arise, I’m sure we would find new laws prohibiting normal people from running for office. We are close to check mate, we better wake up.

  12. You’re right about the jobs, Steve, though the contribution to ongoing unemployment is still there. But I’m right about the effort to cut back unemployment benefits while we still have a U6 of 15.6%.

  13. I wish we could be informed about the issues and not just the mud slinging. What did the first house bill have in it that made the senate change it? Was the pipeline bit the big deal and they are trying to get around it by only extending it 2 months? If that’s it then the Dem’s are being the shifty ones in my opinion. If it’s something more no one is trying to let the people know.

  14. Jim

    A couple of things. You started by claiming that everything Shaun said was correct when Shaun only commented on the pipeline issue and is clearly wrong about it. You then asserted that the bill required firing people only to admit it doesn’t. Now you assert it reduces UI benefits. Even the CBPP doesn’t agree with that. The bill requires people to have a GED or be pursuing one. It allows states to drug test beneficiaries but doesn’t require it. That’s all it does according to the CBPP.

    Yes there are other leftist websites claiming it cuts benefits, but none of them explain how or refer to the text of the bill. In the text of the bill, I see nothing that accords with your contention but if you know of something that is more than an assertion as you made, I would love to see it.

    But so far, you have been wrong twice.

  15. EEllis,

    To clarify, the difference is as follows. The House agreed on how to pay for the bill and passed a bill that paid for a one year payroll tax cut, the doc fix and the UI extension. The Senate could not pass such a bill and passed a 2 month extension instead. Both bills included the same pipeline provision but the Senate bill is only 2 months because they couldn’t agree on how to pay for a longer extension.

  16. $40 bucks a week for 100 million Americans means 4 billion dollars a week and there are far more than 100 million paychecks, closer to double. However that’s 208 billion dollars a year into the government coffers. A trillion in less than five years. Now what shall we buy with this? I’m not sure, but certainly not tax cuts for the rich.

    What is certain, is that the House bunch under Cantor reneged on the deal already agreed too. Clearly Boehner is Cantor’s puppet. Sounds more like the dealings in a communist politburo than any congress.

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