House Republicans Pass Payroll Tax Bill, Gain Leverage On Senate Dems

The Hill

House Republicans easily approved a one-year extension of the payroll tax cut over a presidential veto threat Tuesday, setting up a confrontation with the White House and Senate Democrats.

The 234-193 vote throws the GOP year-end package into the Senate’s lap, where Majority Leader Harry Reid (D-Nev.) vowed to reject it over a number of provisions that Democrats find unacceptable.

The maneuvering added yet another twist in a rapidly closing window for Congress to act on several high-priority issues. Two major year-end pieces of legislation, the payroll tax package and an omnibus spending bill, converged politically as Republicans accused Reid of holding up an agreement on the spending bill until the GOP made concessions on the payroll tax measure.

As the legislative calendar winds down its final days, a $1,000 tax bill for the average family, insurance benefits for the jobless and the operations of the federal government all hang in the balance.

Republican leaders used the House vote to pressure the Senate and Obama, denouncing the president for threatening a veto on a bill that includes two central elements of his jobs plan — the payroll tax holiday and unemployment benefits.

“We’ve passed a large bill that contains many of the priorities of our caucus and the White House. We’ve worked to find common ground,” House Speaker John Boehner (R-Ohio) told reporters after the vote. “Now Senate Democrats must act.”

Senate Democrats said Tuesday evening they wanted to vote on the House bill immediately but that Republicans objected.

The White House, which earlier on Tuesday threatened to veto the House package, ripped the House vote.

“This Congress needs to do its job and stop the tax hike that’s scheduled to affect 160 million Americans in 18 days,” White House press secretary Jay Carney said in a statement. “It is our expectation that in the eleventh hour Congressional Republicans and Democrats will come to an agreement to protect the middle class and finish their budget work for the year,” he said.

The administration’s veto threat referenced provisions that Republicans use to pay for the bill, including the repeal of funding for the 2010 healthcare law and measures that, the White House said, broke a spending agreement hatched this summer during the debt-limit deal. Obama has previously threatened to reject the GOP bill over the inclusion of a measure forcing the administration to expedite a decision on the Keystone XL oil sands pipeline.

“This debate should not be about scoring political points. This debate should be about cutting taxes for the middle class,” the administration said in its veto threat.

Boehner added many of those items to win support from conservatives, but he lost the votes of most House Democrats in the process. All but 10 Democrats opposed the legislation after party leaders whipped their members against it. The Democrats who voted yes all waited until the bill was assured of passage before casting their votes.

GOP leaders spent the day trying to cobble together as much Republican unity as possible. While Boehner and Majority Whip Kevin McCarthy (R-Calif.) vowed during a morning press conference that the bill would pass, the Speaker told his conference he was pushing for 240 GOP votes to give him additional leverage and “a strong hand” in negotiations with Democrats. He lost 14 Republicans in the final vote.

Highlighting the confrontation with Obama over the Keystone pipeline, Boehner has been able to win over conservatives who were initially opposed to the president’s push to extend the payroll tax holiday and unemployment benefits. In addition to the Keystone provision, Republicans included measures delaying environmental regulations, limiting the duration of jobless benefits and restricting benefits for illegal immigrants, among other sweeteners. They proposed to offset the cost of the bill in part by extending a federal-worker pay freeze and reducing certain Medicare benefits for the wealthy.

Democrats assailed the GOP for including extraneous and “ideological” items in the bill. Minority Leader Nancy Pelosi (D-Calif.) called the Keystone provision “a poison pill” and the No. 2 House Democrat, Rep. Steny Hoyer (Md.), said it was “a stick … in the eye” of Democrats. Pelosi questioned whether Republicans wanted to see the payroll tax extended at all.

Across the Capitol, Reid said House Republicans were wasting their time in sending over legislation that he has declared dead on arrival.

At press time, Reid accused Senate Minority Leader Mitch McConnell (R-Ky.) of blocking a vote on the House-passed measure.

McConnell could be worried about defections. Earlier this month, McConnell’s alternative payroll tax holiday bill was rejected by most of his GOP colleagues. Reid said late Tuesday that he can’t schedule an immediate roll call without McConnell’s approval. He added such a vote would be an “exercise in futility,” though necessary to jumpstart bipartisan negotiations.

Reid signaled he is open to a compromise on the payroll tax cut in which it is not offset by either tax hikes or spending cuts.

“There should be a contribution, ever be it so slight, by the wealthiest of the wealthy,” Reid said of Democratic efforts to pay for the measure with higher taxes on annual income above a million dollars.

But when asked if he could support an extension that was not offset, he replied, “Yes.”

Republican leaders have said the payroll tax cut and the jobless benefits must be paid for, and Senate GOP Leader Mitch McConnell (Ky.) reiterated that position Tuesday.

Meanwhile, each side let loose with accusations about the motivations of the other in the year-end wrangling. Republicans charged that Reid was holding the $1 trillion omnibus spending bill “hostage” until the GOP agreed to an acceptable deal on the payroll tax.
“They’ve smiled at each other, they’ve shook hands and it’s done,” Boehner said.

Hoyer acknowledged that the substance of the legislation was “98 percent done” but that the sequencing was an issue. At the same time, the Maryland Democrat rejected the charge that Reid was obstructing the bill.

Hoyer cited a concern echoed by other Democrats: that Republicans wanted to pass their version of the payroll tax cut and the spending bill and leave town, forcing the Senate to accept them unchanged.

“There is a concern that we would pass the megabus and that Republicans would then go home,” Hoyer said, referring to a package of spending bills funding much of the federal government through 2012. “Now Speaker Boehner has assured me they won’t do that.”

Asked to respond to Hoyer’s comments, a Boehner spokesman, Michael Steel, said: “We will be waiting for the Senate to act.”

In a final sales pitch before the House vote Tuesday, Boehner told his members the bill “is a good piece of legislation” that has “been worked on by everybody.”

“[Boehner said] it needs to get done, and instead of allowing the Senate to stab the country in the back, we need to finish our work,” said Rep. Tom Price (Ga.), the chairman of the Republican Policy Committee.

Read more: