Payroll Tax Conferees Limp to Deadline

While the conference negotiators tasked with extending three economic priorities through the end of 2012 grapple with  "pay-fors" to offset spending, leaders from both political parties warned today that the conferees could be headed for another deadlock.  

The conference committee  has nine days before it is expected to report back to Congress.

"We have significant concerns about whether Senate Democrats are really willing to step up and work with House Republicans on the payroll tax cut bill," House Speaker John Boehner, R-Ohio, said.  "We've been in conference trying to work out our differences, but what's pretty clear is that Senate Democrats have never come to the table with a plan to offset this new spending that they're all for."

The 20-member bipartisan, bicameral panel is working to extend the payroll tax credit through the end of the year, reform and extend unemployment insurance and also enact a so-called Doc Fix for physicians treating Medicare patients.

The conference committee held its fourth public meeting today, deliberating for almost two and a half hours over spending cuts and new revenue to cover the $150 billion to $160 billion price tag of the extensions.

Republicans and Democrats alike recognized that time is running out on negotiators to come up with a deal that both chambers of Congress can pass before the Feb. 29 deadline. The committee has targeted Feb. 17 as the day to complete its work so that both bodies have enough time to pass the bill.

Sen. Max Baucus, D-Mont., the top Democrat participating in the negotiations, said he believes the committee is "making real progress" and he hopes it can reach an agreement soon. 

"We don't have time," Baucus, the chairman of the Senate Finance committee, said. "In fact I think we have less time than we think we have. By that I mean I think we have to wrap this up…in a matter of days, and I would urge us to be thinking of ways that we could compromise."

As today's meeting drew to a close after nearly two and a half hours of negotiations, Rep. Dave Camp, R-Mich., the chairman of the conference negotiations, said he wasn't sure how soon the committee would meet again, but he asked the conferees to be flexible and prepared to meet "on a moment's notice" in the days ahead.

"Our time is short. We do need to find 'pay-fors' that will pass both bodies," Camp, the chairman of the House Ways and Means committee, said. "We don't have a lot of time left, and we need to begin to move very quickly."

Republicans prefer covering the cost by extending a pay freeze on federal employees, saving $26 billion; reduce Medicare subsidies to wealthy seniors, cutting $31 billion; and rolling back subsides from the Affordable Care Act, which Camp said would save $13 billion. Those three reductions would cover almost half of the estimated cost of the extensions.

But  House Minority Whip Steny Hoyer, the No. 2 ranked Democrat, said  that Democrats do not want to pay for the unemployment insurance extension because they consider it an emergency. Instead, they want to use savings from the winding down of the wars in Afghanistan and Iraq to pay for the doc fix, and they prefer to pay for the payroll tax cut with a surtax on millionaires.

"We continue to believe that the way to pay for this is the surtax on millionaires and dealing with oil company subsidies. That will get you to where you need to be," Hoyer, D-Md., told reporters at his weekly pen-and-pad briefing. "To the extent that Republicans believe you need to fund tax cuts, it's interesting they feel you don't need to fund tax cuts for the wealthy, but you do need to fund tax cuts for working Americans."

"It will not impose a burden on anybody," Hoyer continued. "The oil companies, of course, are making their biggest profits ever, and people who are making over a million dollars - contributing a little additional is not going to hurt them either, and it is a way for them to help their country and to help working Americans have some more money in their pockets."

Boehner reiterated that House Republicans passed a one-year extension on Dec. 13, setting the stage to blame Democrats if the committee fails to strike a deal on a long-term extension.

"The House did its work last December.  We did what the president asked for.  We extended unemployment insurance, with reforms, we extended the payroll tax credit for a year, and we dealt with the so-called doc fix for those doctors who deal with Medicare patients and their reimbursements. All of the spending was offset," Boehner said. "We want to extend this program, but we're going to continue … with reductions of spending elsewhere."

After Senate Majority Leader Harry Reid suggested it may be time for Congress to move to Plan B, Senate Republican Leader Mitch McConnell called on lawmakers not to give up hope on the conferees.  "The Democratic majority in the Senate should be leading that effort, not rooting for its failure," he said.

"Let's allow the conferees to finish their work, get this payroll tax cut extended for the rest of the year. That's what Republicans want. That's what the president says he wants. There's no reason we shouldn't be able to get this done," McConnell, R-Ky., said. "When the majority leader of the Senate suddenly announces that he's working on a proposal of his own to extend this tax cut even as a conference committee is in the midst of negotiating a bipartisan solution that everybody can support, I think it's pretty obvious where the problem lies.

"All we get from the Democratic majority in the Senate," he said, "are exaggerated claims, ad hominem attacks, and false accusations aimed at delaying a solution rather than achieving one." 

ABC News' Sunlen Miller contributed to this report

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