Holiday Showdown Over Payroll Tax Tests Obama, GOP


Stuck in a stalemate, President Barack Obama and his Republican rivals are slugging it out in Washington rather than reaching for a holiday season accord to prevent payroll taxes from going up on 160 million workers.

The tax increases, as well as cuts to Medicare doctors’ fees and a lapse in jobless benefits, are due Jan. 1. They are looming even though Democrats and Republicans agree that they shouldn’t happen. Instead of stopping them, the factions have painted themselves into a corner.
House Republicans are demanding that the Senate join negotiations to produce an agreement within days; Senate Democrats insist no talks will take place before the House approves a stopgap measure to buy more time.

A House vote Tuesday scuttled a bipartisan Senate deal for a two-month extension of all three policies: the payroll tax cuts, jobless benefits and Medicare fees.

After the House killed the Senate measure on a 229-193 vote, Obama signaled he’ll use his presidential megaphone to try to force Republicans controlling the House into submission.

“Now let’s be clear,” Obama said at the White House. “The bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on Jan. 1. The only one.”

The Obama campaign promptly took to Twitter and Facebook to fight it out. With their candidate’s poll numbers rising, Democratic operatives seemed almost giddy at the prospect of a prolonged battle.

Republican lawmakers relished the battle as well, though some of them are too inexperienced to know that presidents _ regardless of party _ usually win such high-profile fights, like President Bill Clinton did over a 1995-96 government shutdown or President George W. Bush did in skirmishes on anti-terror policies.

House Republicans instead rallied around a plan passed last week that would have extended the payroll tax cut for one year. But that version also contained spending cuts opposed by Democrats and tighter rules for jobless benefits.

If legislation isn’t passed by New Year’s Day, payroll taxes will go up by almost $20 a week for a worker making a $50,000 salary. Almost 2 million people could lose unemployment benefits as well, and doctors would bear big cuts in Medicare payments.

Whatever the stakes, there was little indication that Republicans would get their wish for negotiations with the Senate any time soon. Senate Majority Leader Harry Reid, D-Nev., issued a statement saying he would be happy to resume talks on a yearlong measure _ “but not before” the House ratifies the two-month bill and sends it to Obama for his signature.

Given Obama’s remarks and Reid’s refusal to negotiate, it was unclear what leverage Republicans had in the year-end standoff. It appeared likely the partisan disagreement could easily persist past Christmas and into the final week of the year.

A little-noticed element of the brawl was that the House-Senate parliamentary situation, which can be a critical factor, is all messed up. The Senate adjourned Saturday until Jan. 23 except for so-called pro forma sessions in which legislative business _ like responding to the House moves _ is basically impossible unless all 100 senators agree. That’s never a sure thing.

The standoff was sowing confusion among business executives, who were running out of time to adapt to any new payroll tax regimen. Even the Senate’s proposed two-month extension was creating headaches because it contained a two-tiered system geared to ensuring that higher-income earners paid a higher rate on some of their wages, according to a trade group.

“There’s not time enough to do that in an orderly fashion,” said Pete A. Isberg, president of the National Payroll Reporting Consortium trade group. “We’re two weeks away from 2012.” He wrote a letter to congressional leaders this week warning that the Senate bill “could create substantial problems, confusion and costs.”

Meanwhile, Medicare announced Tuesday that, as it has in the past when doctors’ reimbursements have been cut through congressional inaction, it would withhold physicians’ payments for two weeks in January to avoid passing on a 27 percent cut in Medicare fees. The hope is that the problem gets fixed by then.


  1. Kim Jung Un

    Are you really concerned about North Korea’s appointment of the “dear leader”, Kim Jung Ill’s youngest son to be the new leader of North Korea — a nuclear power!

    After all, Kim Jung Un (pronounced Kim’s young-un?) had NO military experience whatsoever before daddy made him a four-star general in the military. This is a snot-nose twerp who has never accomplished anything in his life that would even come close to military leadership: he hasn’t even so much as led a cub scout troop, let alone coached a sports team or commanded a military platoon. So, setting that aside, next they make him the “beloved leader” of the country. Terrific!!!

    Oh, crap! I’m sorry. I just remembered that we did the same thing here, we took a community organizer, a guy who has never led anything more than an ACORN demonstration; one who has never even worn a uniform, and made him Commander-in-Chief – the leader of this country. Guess we’re not so different from North Korea after all……

  2. In the coming New Year, 2012, both Groundhog Day and the State of the Union address will occur on the same day.

    This is an ironic juxtaposition of events.

    One involves a meaningless ritual in which we look to an insignificant creature of little intelligence for prognostication.

    The other involves a groundhog.

  3. Republican Senator Mitch McConnall threw The House Repubs and Bonehead Bohner, under the demonrat bus. What a Mess!

  4. CWJ – Exactly. Once again, the Wimpublican “leadership” has astonishingly (though not unexpectedly) managed to turn a SURE WINNER into whimpering self-doubt and eventual capitulation.

    The REPUBLICANS are ONCE again allowing the DEMON RATS to CONTROL the fight.
    They started out with a winner when they tied the KEYSTONE PIPELINE to the BILL which will ACTUALLY EMPLOY AMERICANS in HIGH PAYING JOBS and ACTUALLY paying lots of $$$$$$$$ in taxes.

    ONCE again they allow the GOVERNMENT PROPAGANDA MACHINE to dictate the CRAP SANDWICH of a 60 day extension that will cost more than the country can afford AND CAN BE SOLD AS A GIFT FROM OBAMA is better for the country that the Keystone pipeline jobs immediately.

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