Fight Over Extending Payroll Tax Cut Flares Up Again

House Republicans are rejecting a bipartisan compromise approved overwhelmingly by the Senate Saturday. The deal would have extended the payroll tax holiday and unemployment benefits through February.

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RENEE MONTAGNE, HOST:

Just when it looked like a done deal to extend the payroll tax holiday along with unemployment benefits, the House said no to the Senate. The wrangling over how to best extend the benefits through February will now continue because House Republicans are rejecting a bipartisan compromise approved overwhelmingly by the Senate Saturday and supported by the president. NPR's Tamara Keith joins us to discuss the standoff. Good morning.

TAMARA KEITH, BYLINE: Good morning.

MONTAGNE: Well, let's talk about the bill that the Senate passed Saturday morning. What exactly did it contain?

KEITH: Well, it's a two-month extension of unemployment benefits, the payroll tax holiday and the so-called doc fix, which deals with Medicare reimbursements. But it is only two months, and that's simply because Senate negotiators couldn't agree on how to pay for a yearlong extension, though everyone agrees that's what should happen, ultimately. And it also contains language regarding the Keystone XL Pipeline that would force the president to decide on the controversial pipeline within 60 days, and that was a key GOP demand.

MONTAGNE: So how did this done deal get undone?

KEITH: House Republicans had a conference call on Saturday, and I'm told that House Speaker John Boehner described getting the Keystone language in the bill as a victory, and then he presented his conference with three options: approve the Senate bill, amend the Senate bill or go to a conference committee to hash out the differences. And a spokesman for Speaker Boehner tells me there was zero support for accepting the Senate bill. And, in particular, as Speaker Boehner said on NBC's "Meet the Press" yesterday, there were concerns with passing just a two-month extension instead of a full year.

(SOUNDBITE OF SPEECH)

REPRESENTATIVE JOHN BOEHNER: Two months is just kicking the can down the road. The American people are tired of that. Frankly, I'm tired of it.

MONTAGNE: Now, the Senate bill passed 89 to 10, so there was clearly strong bipartisan support. Was there ever reason to believe that the House would not also support it?

KEITH: On Friday, when the idea of a short-term extension was floated, reporters asked Speaker Boehner about it, and here was his response...

(SOUNDBITE OF SPEECH)

BOEHNER: We will make changes to that bill, and I'll guarantee you the Keystone pipeline will be in the bill when it goes back to the United States Senate.

KEITH: You'll notice he talks about the Keystone pipeline, but he doesn't say anything about having issues with the two-month extension instead of a full year. And so when the Senate approved a bill that contains the pipeline provision, a lot of people assumed the House would be on board. The Senate said it was done taking votes for the year and wouldn't be back until January 23. A lot of people thought this was done.

MONTAGNE: And what happens later today? I mean, the Senate was going to go on vacation. How is it responding to this?

KEITH: The Senate is still on vacation. The House is scheduled to return tonight to vote. And a spokesman for Senate Majority Leader Harry Reid says he has no intention of bringing the Senate back. He says if the House doesn't approve this measure that had bipartisan support, then it's on the House that taxes are going to go up on working Americans after January 1st. A Republican staffer on the House side says that's a politically untenable position. We'll just have to see how this plays out over the week.

MONTAGNE: Where does this leave taxpayers and the unemployed?

KEITH: In a total state of uncertainty. If the House and the Senate don't work this out before the start of the year, doctors would see Medicare reimbursements plummet. Workers would see a little bit less in every paycheck, about 40 bucks every two weeks for those earning $50,000 a year. And significantly, the extended jobless benefits that so many long-term unemployed count on, those will begin to go away. And according to one estimate, just in January alone, 1.8 million people would lose jobless benefits.

MONTAGNE: NPR congressional reporter Tamara Keith. Thanks very much.

KEITH: Thank you.

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