House, Senate show no give in tax fight

Associated Press

ANDREW TAYLOR,Associated Press

Updated: Dec 21, 2011 12:48 PM

WASHINGTON (AP) — House and Senate leaders traded demands Wednesday but remained mired in a bitter holiday-season stalemate that is threatening 160 million workers with Jan. 1 tax increases and millions of the long-term unemployed with an end to their benefits.

In a letter, Senate Majority Leader Harry Reid urged Speaker John Boehner to bring House lawmakers back to Washington and approve a bipartisan measure the Senate approved overwhelmingly last weekend. That bill would extend the payroll tax cut and jobless benefits for two months, giving bargainers time to agree to a more expensive, yearlong measure.

"Because we have a responsibility to assure middle-class families that their taxes will not go up while we work out our differences, we must pass this immediate extension first," wrote Reid, D-Nev.

Minutes later, Boehner, R-Ohio, and other top House Republicans invited reporters into a meeting where they urged Reid to bring senators back to town so they can negotiate over a yearlong extension of the tax cut and jobless benefits. The bill would also postpone a scheduled Jan. 1 cut of 27 percent in payments to doctors who treat Medicare patients.

"All we're asking for is to get Senate members over here to work with us to resolve our differences so we can do what everybody wants to," Boehner said.

President Barack Obama and leaders of both parties want to extend the tax cuts and jobless benefits and prevent the cut in doctors' reimbursements for an entire year. Most lawmakers have left Washington for the Christmas and New Year's holiday, but could quickly return to vote on any agreement.

The back and forth underscored a pressure-packed partisan fight, being waged on the eve of a presidential and congressional election year, in which neither side is showing any indication of give.

In a moment of political theater, Democrats tried to get the House to consider the two-month extension of the payroll tax cut as the chamber convened for a ceremonial session at which no formal business was scheduled. But acting speaker Rep. Michael Fitzpatrick, R-Pa., adjourned the chamber and walked out.

"Mr. Speaker, you're walking out. You're walking away just as so many Republicans have walked away from middle-class taxpayers" and others, Rep. Steny Hoyer of Maryland, the No. 2 House Democrat, shouted to an empty chair where the House presiding officer sits.

Republicans also came under pressure from their own usual allies when an opinion article on the Wall Street Journal's conservative editorial page accused the GOP of botching the fight over the payroll tax cut.

"Republicans would do best to cut their losses and find a way to extend the payroll holiday quickly," the editors wrote.

On Tuesday, the House voted 229-193 to kill the Senate measure. Afterward, 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 Bill Clinton did over a 1995-96 government shutdown or 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.

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.

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