The Senate’s two-month payroll tax extension is dead on arrival in the House. House Speaker John Boehner, R-Ohio, made that perfectly clear Sunday morning as he said that Congress will have to negotiate a deal closer to the House-passed one-year extension before members leave for the holidays.
“Well, it’s pretty clear that I and our members oppose the Senate bill – it’s only for two months,” Boehner said on NBC’s Meet the Press. “If you talk to employers, they talk about the uncertainty. How can you do tax policy for two months?”
The remarks came a day after a conference call among House members in which even seasoned moderate Republicans joined the roster of tea party-inspired freshman in vehemently opposing the bill. Or, as one senior House GOP aide put it, "If you're a fan of the Senate bill, the situation is not good. That will never pass and almost no one in the conference wants it."
Unsurprisingly, Boehner’s comments don’t sit well with Senate Majority Leader Harry Reid, D-Nev. The two-month extension he negotiated last week with Minority Leader Mitch McConnell, R-Ky. – after Boehner left the talks mid-week, challenging the Senate to come up with a plan – sailed through the Senate 89 to 10 on Saturday.
By seeking to reopen the Senate compromise, Boehner is essentially trying to force Reid and Senate Democrats to negotiate twice.
“When we met last week, Speaker Boehner requested that Senator McConnell and I work out a compromise. Neither side got everything they wanted, but we forged a middle ground that passed the Senate by an overwhelming bipartisan majority," Reid said in a statement Sunday.
Reid's statement did not suggest any openness to a conference committee to iron out the two chambers' differences, as Boehner suggested. McConnell, meanwhile, is publicly supporting Boehner's call for a conference committee.
"The House and Senate have both passed bipartisan bills to require the President to finally make a decision on the Keystone XL jobs, and to extend additional unemployment insurance, the temporary payroll tax cut and seniors’ access to medical care," McConnell spokesman Don Stewart said. "The House and the President both want a full-year extension. The best way to resolve the difference between the two-month extension and the full-year bill, and provide certainty for job creators, employees and the long-term unemployed, is through regular order, as the Speaker suggested."
For its part, the White House says it is done negotiating. If the House doesn't pass the Senate version of the bill, the president won't bargain any more, said Dan Pfeiffer, the communications director. Unless House Republicans sign on, "there will be a significant tax increase on 160 million hardworking Americans in 13 days that would damage the economy and job growth," he said in a statement.
The widespread House GOP loathing for the bill is driven by both legislative and political concerns.
Republicans believe as a matter of policy that a two-month extension creates the very kind of economic uncertainty they have railed against for nearly three years; they have no interest in keeping taxpayers and Medicare-participating doctors on edge, wondering if the policy will be extended in two months.
House GOP members also know the bill wouldn’t play out well for them politically, House GOP sources said. They see themselves getting crushed by a short-term outcome now and continued finger-wagging later from President Obama on extending the payroll tax cut, which would allow Democrats to appear more aggressive on tax cuts than Republicans.
And it’s no secret the American Medical Association opposes the two-month "doc fix" to protect doctors from a scheduled 27 percent cut in reimbursements for Medicare beneficiaries – a scenario that would create intense lobbying pressure until February, something House Republicans want to avoid.
While it is frequently asserted the House GOP problem is between Boehner and Majority Leader Eric Cantor, R-Va., a more insidious tug-of-war appears to be the culprit in this case. Boehner and McConnell – usually closely aligned, as in the case of the debt-ceiling debacle this summer – are apparently at odds over the end-of-year package. Boehner never signaled to McConnell in their private talks last week that he would accept the two-month deal being negotiated with Reid, aides said.
Boehner is now confronting a very real sense among rank-and-file House Republicans that McConnell either rolled Boehner or treated the House bill so dismissively in the end-game negotiations that the House GOP must rebel to assert its legislative power and preferences.
Rather than pass the Senate bill – which President Obama embraced Saturday – Congress should assemble a formal joint House-Senate conference to hash out a deal in regular order, Boehner said Sunday.
“We’ve got two weeks to get this done,” Boehner said. “Let’s do it the right way.”
Senate Democrats, however, emphasized that they cut their two-month agreement with McConnell with the understanding the Senate Republican leader was negotiating on Boehner's behalf. Speaking Friday, Boehner did not object to a two-month deal as long as it included Keystone language.
"Last week, Speaker Boehner sat in a meeting with Leader Reid and Leader McConnell and he gave Leader McConnell his proxy to negotiate a bipartisan compromise," Sen. Charles Schumer, D-N.Y., said in a Sunday statement. "He made public comments promising to live by whatever agreement the Senate reached. He said, 'If the Senate acts, I’m committed to bringing the House back—we can do it within 24 hours—to deal with whatever the Senate does.' The Senate came to a deal, and now Speaker Boehner must keep his word."
"The Speaker needs to put the Senate's bipartisan compromise on the floor and let House Democrats and the remaining sane members of the House Republican caucus vote for it," Schumer said. "Otherwise, taxes will rise on the middle class, and the House Republicans alone will be to blame. If House Republicans let taxes go up on the middle class on January 1, it could very well cost them the majority in the House next year. And they will deserve it."
House Democrats were also quick to lambaste Boehner for his remarks.
“It is time for Speaker Boehner to demonstrate real leadership and bring [the Senate bill] up for a vote tomorrow,” said Rep. Chris Van Hollen, D-Md, in a statement. “We are witnessing a pattern of Speaker Boehner walking away from bipartisan compromises to kow-tow to his extreme tea party wing of his caucus.”
Going into any negotiations, House Republicans are determined not to forfeit what they see as a huge concession from Senate Democrats: the decision to drop a millionaire surtax as the means of financing the payroll tax cut extension. They don't want to give that up now after having remained unified and winning it, despite intense and at times unnerving political heat.
A senior House GOP aide familiar with the emerging strategy and ever-rising rank-and-file antipathy to the Senate bill summarized the situation:
"We have to get out of the cul-de-sac of the Senate only being able to produce the lowest common denominator and then trying to force a terrible product on the House," the aide said. "Our members are fed up with that and are ready to have a fight if that's what it takes to get a good product."
Boehner on Sunday suggested that compromise shouldn’t be difficult to reach, the record of this Congress notwithstanding.
“I think if you look at the House-passed bill, we did everything the president asked for,” Boehner said. “We paid for this, offset it with reasonable reductions in spending. Ninety percent of those reductions, frankly, the president agrees with.”
Asked if they could reach a compromise on the extension package by Christmas, the Speaker responded, “How about tomorrow?”
Daniel Friedman and Shane Goldmacher contributed.