House Rejects Senate's Payroll Tax Extension

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The House blew up the end-of-year deal to extend the payroll tax holiday, but it insists it's the Senate's fault. If both chambers fail to forge a compromise, taxes go up, unemployment benefits expire and payments to Medicare doctors get cut by 27 percent — all starting Jan. 1.

ROBERT SIEGEL, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

The Republican-led House upped the stakes today in a risky political showdown. It rejected a Senate compromise that would extend for two months expiring payroll tax cuts and unemployment benefits. Republican leaders say they want a full year extension and they're demanding a conference committee to resolve differences with the Senate. Democrats claim the Republicans real goal is to scuttle the extensions and to pin the blame on President Obama's party.

NPR's David Welna has our report for the Capitol.

DAVID WELNA, BYLINE: It may be the season of Christmas and Hanukkah cheer, but the mood in the House today as grim and defiant. The Republicans in charged closed ranks to reject the two-month extension compromise that the Senate passed 89-10 before leaving town Saturday. Not a single Democrat joined them. House Speaker John Boehner insisted there's still time to keep the payroll taxes' 160 million workers from going up January 1st.

REPRESENTATIVE JOHN BOEHNER: We've got 10 days to do our work, and we can resolve the differences between the House and Senate bill. Everybody wants this extended for a year, but it just happens to be inconvenient for some to try to resolve it at this point. Why? Because we're getting close to the holidays.

WELNA: And even though Boehner six months ago called a year-long payroll tax cut extension, quote, "a short-term gimmick," House Majority Leader Eric Cantor said that is exactly what is needed.

REPRESENTATIVE ERIC CANTOR: Bottom line, a two-month patch is irresponsible. That's why the House is taking a stand. We believe all Americans deserve certainty.

WELNA: Republicans cast Democratic leaders who refuse to appoint anyone to a conference committee as shirking their duties to enjoy the holiday season. Tom Reed is a Republican from Upstate New York.

REPRESENTATIVE TOM REED: Yes, we want to be with our families for Christmas. We want to be home ringing in the New Year with our family and friends. But you know what, the American people deserve better. We are willing to stay here and do the work.

REPRESENTATIVE FRANK PALLONE: Don't kid anybody here. At the end of the day, the Republicans are going to go home.

WELNA: That's New Jersey Democrat Frank Pallone. He said it made no sense for House Republicans to have scuttled the Senate bill.

PALLONE: All I can think of is that the Tea Party Republicans, the extremists on the Republican side are wagging the Republican dog and saying to your leadership: We don't want to do this. They don't want the payroll tax extension. They don't want the unemployment extension.

WELNA: And Minority Leader Nancy Pelosi accused her GOP colleagues of privately rooting for failure.

REPRESENTATIVE NANCY PELOSI: Remember Yogi Bear. I don't like the food at that restaurant and the servings are too small. They don't like the tax cut, and now they're claiming that it is too small.

WELNA: Democrats cast Republicans as grinches, who only defend tax cuts for the wealthy. For the rest, said Washington State's Jim McDermott...

REPRESENTATIVE JIM MCDERMOTT: They have a lump of coal. They're going to say to 160 million people, we're going to boost your taxes.

WELNA: Democrats are convinced Republicans will take the blame if the payroll tax cuts and unemployment benefits expire. On MSNBC today, New York Senator Charles Schumer declared the public is on the Democrat side.

SENATOR CHARLES SCHUMER: The Republicans are losing on their signature issue, which is tax cuts for of he middle class. In a few days, they will fold if no one falls for these subterfuges, which get them off the hook without producing a middle class tax cut.

WELNA: After today, President Obama went to the White House briefing room with a message for Speaker Boehner.

PRESIDENT BARACK OBAMA: Let's be clear. Right now, the bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on January 1st.

WELNA: The American people, he added, are weary of brinksmanship.

David Welna, NPR News, the Capitol.

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