For Now, Senate Democrats Prefer One Deal for Payroll Tax, Other Expiring Policies

Jacquelyn Martin/AP Photo

Senate Democrats said today they prefer letting the conference committee keep working to strike a single complete deal covering the payroll tax extension and the other two policies that are set to expire at the end of the month - unemployment insurance and the so-called Medicare "doc fix."

"There's time left for the conference committee to work out a full package that does not just include the payroll tax cut but also UI [unemployment insurance extension], the 'doc fix.' We prefer to resolve these issues now, at once," Sen. Chuck Schumer, D-N.Y., told reporters today. "We are hopeful the conference committee will come up with a package that is complete."

On Monday the House Republican leadership announced that they are preparing a contingency plan in case negotiators on the payroll conference committee fail to reach a deal.   The heart of the House GOP's backup plan would extend the payroll tax credit through the end of the year without offsetting the cost of spending cuts elsewhere. Negotiators would separately work out a compromise on the "doc fix" and unemployment insurance, in addition to offsets to pay for it all.

Senate Democrats said if House Republicans seek to go ahead with their backup standalone bill on payroll tax, they will risk "looking like they are leaving unemployed Americans in the lurch."

"We're very glad that they gave in on the payroll tax cut, but they should not be under the illusion that they can figure now 'job done,'" Schumer said. "I don't think the Republicans want to leave town and tell the unemployed, 'You get no benefits.'"

Democrats today refused to commit to voting on a payroll tax cut extension without unemployment benefits and the doc fix attached, should the House of Representatives pass such a measure before the President's Day recess next week.

Democrats promised they would not stop until the work is complete on the unemployment insurance as well and are "still considering" an alternative bill if the conference committee fails.

Senate Majority Leader Harry Reid, D-Nev.,  said that in some form the payroll tax credit will be extended, but added: "We cannot leave here without the conference committee having resolved the issue dealing with unemployment compensation. It's very important we do that."

Reid says he is "cautiously optimistic" that the conference committee can conclude its work to include both the payroll tax extension, unemployment insurance and some tax extenders.

"Right now, we are waiting to see what we get from the House and then we'll decide what we have to do in the foreseeable future after that," Reid said. "If they send us a standalone bill, it makes our job over here more difficult, because it's hard to attach things to do."

The Senate's top Republican, Mitch McConnell of Kentucky, would not express support for the House Republican plan for a payroll tax cut standalone bill that is not paid for, and said he'd wait to see what comes over from the House.

But McConnell said he understands the House leadership's frustration.

"The conference appears to be going nowhere," McConnell said. "There's a high level of frustration within the conference and I think diminishing optimism about the chances of the conference functioning. So I can understand how the House leadership, exasperated with the lack of progress in the conference, is looking around for other alternatives. I don't have a view on it right now."

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