Payroll Tax Standoff Continues as Republicans, Democrats Refuse to Budge

Some say the leadership lost the argument to President Obama.

Dec. 21, 2011 — -- President Obama today called House Speaker John Boehner, urging him to get House members to support a two-month extension of the payroll tax cuts and unemployment benefits ahead of the winter holiday season and before millions of workers see tax increases on Jan. 1.

The president, who delayed his vacation to Hawaii because of the stalemate, telephoned and urged Boehner, R-Ohio, to bring his caucus members back for a vote and said it is the only viable way to give both sides time to complete work on a full-year extension of the payroll tax cut, White House Press Secretary Jay Carney said.

The president also called Senate Majority Leader Harry Reid, D-Nev., to reaffirm that there will be work on a bipartisan plan after the two-month extention is passed, Carney said.

Boehner's office said the Speaker told Obama "that Republican negotiators remain in Washington and ready to work," but that Senate Democrats needed to come to the bargaining table.

As the stalemate over the payroll tax cut extension drags on, House Republicans and Democrats both staged their own photo opportunities today to underline each party's failure to finish the people's work before lawmakers were released for the holidays.

In dueling displays of discontent, Boehner and Majority Leader Eric Cantor held a media availability in his office while Democrats made a show of force on the House floor as they attempted a maneuver to pass the Senate's two-month extension.

"The House voted to reject the Senate bill and asked for a conference with the Senate where we could resolve the differences between the two Houses," Boehner said, flanked by Cantor and Rep. Renee Ellmers of North Carolina. "We're here and we're ready to go to work, and we're hoping that Senate Democrats will appoint negotiators, come to the table and resolve these differences."

Boehner wants Democrats to sit down for new talks before calling House members -- who are now on recess -- back for a vote. But Reid has rejected such a proposal, suggesting instead that Boehner bring his caucus back to first approve the two-month extension, and then restart talks.

"Once the House of Representatives acts on this immediate extension, we will be able to sit down and complete negotiations on a longer extension," Reid wrote in a letter to Boehner. "But 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."

A row of chairs for Democratic negotiators sat empty across the long conference table, but across the Capitol, two senior Democrats protested the House's opposition to a temporary extension.

As Pennsylvania GOP freshman Michael Fitzpatrick, who was serving as presiding officer, attempted to slam the gavel and end this morning's pro forma session, House Minority Whip Steny Hoyer and Budget ranking member Chris Van Hollen attempted to delay recess by bringing up the Senate's two-month extension of the payroll tax credit and unemployment benefits by unanimous consent.

"Mr. Speaker!" Hoyer, D-Md., shouted. "Mr. Speaker, we'd like to ask for unanimous consent that we bring up the bill to extend the tax cut for 160 million Americans as you walk off the floor Mr. Speaker."

As the procession and Fitzpatrick left the chamber, Hoyer voiced his objections.

"You're walking out!" he complained. "You're walking away just as so many Republicans have walked away from middle class taxpayers, the unemployed, and very frankly as well from those who will be seeking medical assistance from their doctors, 48 million senior citizens."

As he yielded to Van Hollen, the House studio cameras went dark and the microphones were cut off, silencing the House Democrat.

"You have an extreme right-wing element in the House of Representatives that has hijacked the process," Van Hollen, D-Md., said afterwards. "They are afraid of bipartisanship."

House Republicans have earned the ire of conservatives and much political backlash resulting from the payroll tax debate that has gridlocked Congress.

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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