Payroll Tax Standoff Continues as Republicans, Democrats Refuse to Budge


Though the House passed its own one-year extension of the popular Bush-era tax cuts and unemployment benefits well ahead of the Senate around this time last year, the two sides have failed this year in reaching an agreement on the extension of payroll tax cuts, and the House GOP leadership has been publicly blamed for a "fiasco" that could have significant implications in an election year.

The latest shot against House Republicans came today from the Wall Street Journal editorial board -- considered the bastion of conservative opinion -- deriding the Republicans for losing on the tax issue to President Obama.

"The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play," the editorial stated. "Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he's spent most of his presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible."

On Tuesday, House Republicans voted to reject the bipartisan Senate-passed bill, demanding a formal conference to work out their differences and pass a long-term solution instead of what they say is another short-term fix. But Democratic leaders publicly vowed not to appoint any conferees to the negotiations.

The tax cuts benefit 160 million Americans and are set to expire at the end of the year. Starting in January, Americans would see a 2 percent increase in their taxes. Also starting Jan. 1, Medicare would withhold doctors' reimbursement for two weeks until an extension on cuts is negotiated.

Congress members can pass a bill once they return from their holiday break and apply the tax breaks retroactively. But the stalemate and lack of negotiations could have a lasting impact on Americans, especially in an election year in which Republicans wanted to retain majority control of the Senate.

That, many say, could be jeopardized by such deadlocks as this one.

"Through all this analysis of the fiasco, there is a sense of doom for the Republican House. They have gone out on an ice floe with no obvious way back to shore," wrote conservative radio talk show host John Batchelor. "There is a strong possibility that President Obama will nurse the grievance against the Republican Party, and the Tea Party particularly, until the State of the Union."

ABC News' Ann Compton and Sunlen Miller contributed to this report.

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