Boehner: Still 10 days to reach a deal on payroll tax break

The standoff over preserving a tax break continued as House Speaker John Boehner (R-Ohio) showed little sign of reversing course despite sustained criticism from his own party and President Obama.

Boehner assembled his top negotiators for a second day at an otherwise empty Capitol, but their position is being overpowered by the risk of a looming tax hike on Jan. 1. Obama planned to showcase stories of workers who will lose $40 a paycheck later Thursday at the White House.

“We’re fighting to do the right thing,” said Boehner, who wants to launch formal negotiations with Democrats to resolve differing approaches to the issue. “It’s time for us to sit down and have serious negotiations.”

To broker a compromise, Sen. Mitch McConnell of Kentucky, the GOP leader, floated a way out: Have the House accept the Senate’s stopgap payroll tax cut compromise while formal talks get underway.

It was not immediately clear if House Republicans would take the offer. Boehner noted that 10 days remain to reach a deal – a signal the GOP may not be willing to reverse course despite the political pressure to ease out of the stalemate.

The toll the political battle was taking on the GOP leaders was apparent as they insisted the differences between the House and Senate approach could be swiftly resolved. The impasse over the $200-billion package also risks a lapse in unemployment insurance for 3 million jobless Americans and a 20% pay cut for doctors who serve Medicare patients.

“We could probably resolve the differences in an hour,” said Rep. Eric Cantor (R-Va.), the majority leader, who was among those fighting hardest for the House approach. He suggested the president, who ducked out of the White House for a quick Christmas shopping trip this week while his family is in Hawaii for the holidays, could bring the family’s dog Bo to the Capitol for talks. “We’re here and we want to solve the problem.”

The impasse is rooted in the budget issues that have been the signature issue of the House GOP majority. House Republicans want the tax cut paid for with spending cuts that Democrats, who had proposed taxing millionaires to cover the costs, reject.

Unable to reach agreement, the Senate approved a stopgap measure to continue the tax break for two months while talks continue. The GOP-led House rejected that approach.

McConnell, who had been an architect of the compromise, said Thursday both sides should give to reach a solution.

Democrats should appoint negotiators and the “House should pass an extension,” McConnell said in a statement.

Democratic leaders have been skeptical of such an approach. Democrats have resisted formal talks, concerned they will be forced to make further concessions. Already Democrats feel they gave into the GOP demand to include a provision that would accelerate a decision on the Keystone XL pipeline, a controversial project Obama had postponed. They are hestiant to give in further and want assurances the payroll tax cut will be continued.

Both sides say they want to keep the payroll tax break, even though Republicans were initially cool to continuing it into 2012. The tax cut has shaved 2 percentage points off the Social Security tax workers paid in 2011 and mainstream economists say letting workers keep the cash is vital to the growth of nation’s struggling the economy in 2012, a position rank-and-file Republicans take with skepticism.

Now, though, it is the GOP that is fighting for the full-year continuation of the tax break. Boehner called Obama Thursday to reiterate that position. They reject a stopgap measure that passed in the Senate with broad bipartisan support. Republican senators have urged their House counterparts to take the temporary deal that would continue the tax break for two months while talks continue.

A chorus of leading Republicans – in Washington and across the country – have criticized Boehner and his leadership team for threatening a tax hike. Keeping taxes low has been the signature issue of the Republican party, and is now jeopardized.

Democrats are running an orchestrated campaign targeting lawmakers in their home states for risking a tax hike in the new year.

Most lawmakers are home for the holidays, but the Capitol was the scene of dueling news conferences over the issue.

“What are you doing here letting the clock run down?” said Rep. Chris Van Hollen (D-Md.).

lmascaro@tribune.com
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