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Reid Wants Passage of Payroll-Tax Package Before Recess Reid Wants Passage of Payroll-Tax Package Before Recess

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Congress / CONGRESS

Reid Wants Passage of Payroll-Tax Package Before Recess

Senate Majority Leader Harry Reid, D-Nev., may tie the fate of the massive $900 billion-plus government-funding package to the successful passage of a separate bill extending the payroll-tax cut and unemployment benefits.(AP Photo/Harry Hamburg)

photo of Billy House
December 13, 2011

Senate Majority Leader Harry Reid, D-Nev., is insisting that he will not permit any “rushing for the exits” this week by lawmakers wanting to recess for the year until Congress passes a bill to extend the payroll-tax cut and unemployment assistance.

Democratic sources on Tuesday stopped short of saying that Reid--in conjunction with President Obama--will forestall a final vote on the package of nine annual spending bills that were due on Oct. 1 until the payroll-tax cut and unemployment insurance are extended. Both are set to expire at the end of the year.

But Republicans certainly think those are Democrats' marching orders.


Senate Minority Leader Mitch McConnell, R-Ky., accused Obama and Reid of holding the government spending package hostage for political gain.

“This isn’t just irresponsible, it’s reckless,” McConnell said in a floor speech on Tuesday.

To gain leverage in the payroll-tax cut debate, Reid may tie the fate of a separate, massive $900 billion-plus spending plan to finance most government operations in 2012 to the successful passage of the extender bill—even though House Republicans say “a handshake deal” with congressional Democrats was secured.

Despite that accord, McConnell said Reid was asking “his members to hold off signing the bipartisan funding” agreement.

“Put the political games aside,” McConnell urged.

In what may underscore Reid’s determination to get the payroll-tax measure passed, perhaps at the expense of stalling final action on the spending measure, a senior Senate Democratic aide would not rule out the need for another stopgap continuing resolution later this week to keep money flowing to agencies that are covered under the nine tardy spending bills.

The current CR expires on Friday, and without passage of an omnibus package or another temporary funding measure, a partial government shutdown could ensue.

Without saying whether Obama asked Reid to hold up the omnibus package or not, White House spokesman Jay Carney said Congress should not leave town without addressing the payroll-tax cut and other measures, even if that means adopting another CR.

"And I think if they were to do that, they would test the proposition that Congress’s job-approval rating cannot go below 9 percent, because I think that—my expectation is that it would go lower if Congress walked out of town, refusing to extend this payroll-tax cut for middle-class Americans.

"If there is the need, come the end of the week, for Congress to pass another short-term CR, as it has done seven times this year, then they should do that to avoid a shutdown," Carney continued. "We don’t need to get to that point, but if we do, this is certainly not a exceptional action that Congress would have to take to ensure that there is time to get the work done that it needs to get done."

A House Republican aide insisted that a handshake deal was struck with Senate Democratic appropriators on Monday and reiterated on Tuesday that Senate Appropriations Chairman Daniel Inouye, D-Hawaii, “told us he is on board for moving forward on our bill.”

What appears likely is that a near-deal has been reached by the conference committee on the spending bill; legislative aides say that the measure is written and already is more than 3,500 pages long.

Appropriations Chairman Hal Rogers, R-Ky., said on Monday night that “all issues are closed” and that the group had an agreement, period. But ranking member Norm Dicks, D-Wash., was more circumspect, saying “there are a few things left that are still of concern.”

The delay raises the specter of a government shutdown starting Saturday. Reid's position would likely require the House to pass a short-term CR but Michael Steel, spokesman for House Speaker John Boehner, R-Ohio, said House Republicans do not plan to do so.

"We think [Senate Democrats] should pass the omnibus," he said, stressing that Democrats would be blamed for shutting down the government.

A Democratic leadership aide attributed the delay to differences over policy riders.

“We haven’t threatened anything,” the aide said. “The omni is not finished—there are at least five issues still outstanding."

Carney said the negotiations aren't over.

"Despite some of what you’re heard, there’s been no bill filed, there’s been no language shared," Carney said. "But we do know through conversations that there are issues that concern us, including outstanding issues with the funding levels to ensure that the Wall Street Reform and Consumer Protection Act can be implemented successfully."

Rep. Mike Simpson, R-Idaho, the chairman of the House Interior and Environment Appropriations Subcommittee, challenged that assertion.

“The omnibus bill has been agreed to by Republicans and Democrats,” he said.

Even if conferees sign a report, it may not move forward immediately because of the payroll-tax politics.

The Republican-controlled House will vote around 6 p.m. on a GOP version of a bill to extend the payroll-tax holiday for one year; to modify, extend, and overhaul federal unemployment insurance; and to prevent a scheduled reduction in Medicare pay to doctors.

But Democrats, who control the Senate, would revamp the measure, including many of the Republicans’ spending offsets.

They instead back a version that would incorporate Obama’s plan to pay for the cost of extending the payroll-tax cut and unemployment with a surtax on annual incomes exceeding $1 million, Reid said. The Senate Democrats' plan would also make some changes to the federal unemployment system without slashing the length of benefits. The package will include about $35 billion in tax extenders that benefit businesses, teachers and individuals, Reid said.

Democrats also oppose a number of items they are calling “poison pills” in the GOP plan, such as its fast-tracking approval of the controversial Keystone pipeline.

The worry for Democrats is that once both chambers approve the must-pass spending measure, House Republicans will depart from Washington for the year and leave Senate Democrats--essentially--with a take-it-or-leave-it choice on passing the GOP payroll-tax-extender package.

Boehner told reporters on Monday that all of the funding proposals in the GOP package have been discussed before. “Ninety percent of the offsets are offsets that have come from the administration,” Boehner said. “I don’t see any real objections to the pay-fors that are in our bill.”

Nonetheless, House Minority Whip Steny Hoyer, D-Md., said he will push his members to vote against that package, calling it a “partisan bill sticking the finger in the eye of those who disagree with the non-germane policies that are included simply for the purposes of energizing a small political base in their party.”

A few hours later, the White House backed up Hoyer with a veto threat.

Hoyer said that Republicans mean to appease “the narrowest base of any party” he has seen in his 45-year political career with provisions regarding the Keystone pipeline and industrial-boiler regulations.

“If they’re going to pass this one, they are going to need 218 Republicans,” he said. 

Hoyer said a “rational, appropriate way to pay for” the package exists in the aforementioned millionaires' surtax. “It asks those who are the best off in our country to participate, to make a contribution--not to sacrifice--towards helping America right itself from a fiscal prospective,” Hoyer said.

In a statement of administration policy issued on Tuesday afternoon, the Office of Management and Budget said: "If the president were presented with [the House plan] he would veto the bill."

Heading into Tuesday's vote on the package, known as the Middle Class Tax Cut Act, House Republican leaders said they are confident not only that it will pass, but that it will attract some Democratic votes.

“I believe that it will pass with bipartisan support today,” Boehner said. “I look forward to the Senate taking up our bill and passing it."

Boehner could barely contain his glee after meeting with members of his conference Tuesday morning. Singing “Zip-A-Dee-Doo-Dah,” the speaker grinned as he approached a gaggle of reporters before taking on Senate Democrats and the White House for refusing to get behind the bill.

Yet while leadership is publicly confident that the bill will pass, that doesn't mean they have the entire conference lined up behind it.

Majority Leader Eric Cantor, R-Va., widely seen as representing the more conservative wing of the conference, gave only a lukewarm statement at what turned into a GOP leadership pep rally following the meeting.

The bill, Cantor said, is “not our dream proposal—believe me—but it is and does represent a compromise.”

Indeed, “there definitely are still people who are officially undecided,” according to freshman Rep. Tom Reed, R-N.Y., a supporter of the bill.

Boehner has a lot personally riding on passage; he has frequently tussled with his restive conference since Republicans became the majority at the beginning of the year. 

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