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House GOP rejects Senate tax cut compromise

Standoff also puts jobless benefits at risk

House Speaker John Boehner urged President Obama to support additional House and Senate negotiations.Susan Walsh/Associated Press/Associated Press

WASHINGTON - House Republicans yesterday soundly rejected a bill approved by the Senate that would have extended the payroll tax cut for most Americans beyond the end of the year and allowed millions of unemployed people to continue receiving jobless benefits.

The House vote, which passed 229-193, also calls for establishing a negotiating committee so the two chambers can resolve their differences. Seven Republicans joined Democrats in opposition.

But the Senate has left town for the year, and Democrats say they do not intend to call it back, putting continuation of the tax cut in jeopardy and leaving a shadow over many unemployed Americans as the holidays near.


It was far from clear whether the two sides would be able to bridge the gap by year’s end. If they fail to do so, payroll taxes for 160 million Americans will rise in January to 6.2 percent, from 4.2 percent - an average annual increase of roughly $1,000.

Immediately after the vote, Speaker John Boehner released a letter to President Obama, saying that he agreed with him on the need for a full-year extension of the tax cut and unemployment benefits.

“There are still 11 days before the end of the year, and with so many Americans struggling, there is no reason they should be wasted,’’ Boehner wrote. “You have said many times that Congress must do its work before taking vacation. Because we agree, our negotiators and the House stand ready to work through the holidays.

“I ask you to call on the Senate to return to appoint negotiators so that we can provide the American people the economic certainty they need.’’

But in a surprise appearance in the White House briefing room immediately after the vote, Obama called on House Republican leaders to approve the Senate bill, saying that it was the only way forward.


Without such action, the president said, not only would taxes go up and millions of Americans would lose their unemployment benefits, but the economy would suffer as paychecks shrunk.

“Right now, the bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on Jan. 1 - it’s the only one,’’ Obama said.

Speaking with somber intensity, Obama, who had just returned from a ceremony at Andrews Air Base marking the end of the Iraq war, said that the stakes for Americans were high.

“This is not poker, this is not a game, this shouldn’t be politics as usual,’’ he said.

“The recovery is fragile but it is moving in the right direction,’’ Obama said, adding that failure to act quickly “could have an effect on the economy as a whole.’’

Rather than have a straight up-or-down vote, the House implemented a procedural maneuver in which it “rejected’’ the Senate bill while requesting to go to conference with members of that chamber in a single measure, protecting House members from having to actually cast a politically unpopular vote against extending a payroll tax cut.

Democrats said the other party had missed its best chance to protect the economic interests of the middle class.

The bill that the Senate passed Saturday, in an 89-10 vote, would also prevent a sharp cut in the fees paid to doctors who accept Medicare. Some Republican senators, including Scott P. Brown of Massachusetts and Richard G. Lugar of Indiana, have called on their counterparts in the House to support that vote.


Minutes after the vote, Brown expressed his frustration.

“It angers me that House Republicans would rather continue playing politics than find solutions,’’ he said. “Their actions will hurt American families and be detrimental to our fragile economy.’’

Representative Nancy Pelosi of California, the House Democratic leader, blaming “the extreme Tea Party element of the Republicans in the House,’’ noted during the floor debate that Republicans had said a two-month extension was too short.

“They’ve never wanted a tax cut, and now they’re saying the tax cut for middle-income people is too small,’’ she said. “So what is it?’’

With tempers growing short and pressure rising for a deal, Representative Eric Cantor of Virginia, the House Republican leader, seemed to strike a particularly conciliatory tone.

“We need to come together in a responsible manner to find common ground where we can accomplish everyone’s goal of a yearlong payroll tax extension,’’ Cantor said during the floor debate. “Mr. Speaker, there is no reason why the House, the Senate, and the president cannot spend the next two weeks working to get that done. America will be waiting.’’

Senate Democrats, however, have said they would not return to the Capitol to negotiate further until the House passed the short-term bill, one that Senator Mitch McConnell of Kentucky, the Republican leader, negotiated and voted for Saturday, along with 38 other Republican senators.

The standoff leaves Boehner ending the year exactly where he began, in the middle of a nasty fiscal fight with Senate Democrats and his conservative freshmen in revolt, making it difficult to find a middle ground between mollifying his conference and coming up with legislation to avert disaster. But Boehner said repeatedly on Monday that he believed a deal for a one-year extension could still be struck, even with the Senate essentially adjourned for the year and the tax break set to expire on Jan. 1.