GOP puts tax cut at risk

WASHINGTON – Rebellious House of Representatives Republicans fought hard Monday to scuttle a two-month extension of the Social Security payroll tax break, seriously jeopardizing chances that 160 million taxpayers will see the lower rate after Jan. 1.

Speaker John Boehner flatly predicted the bid to keep the rate at its 2011 level of 4.2 percent for two months would fail in the House. A vote is expected today.

“I expect that the House will disagree with the Senate,” Boehner, R-Ohio, said.

The Senate on Saturday overwhelmingly approved the two-month extension. But Boehner and other House Republicans want the lower rate in effect throughout 2012.

Employees have been paying the tax at that rate this year. If no change is approved, they would pay 6.2 percent after Jan. 1.

The Senate bill was a bipartisan compromise, reached after negotiators were unable to agree on how to pay for a full-year plan. Democrats wanted a surtax on millionaires; the GOP proposal included a federal pay freeze.

A House defeat of the Senate package would set up a tense last-minute confrontation. Leaders of the two chambers would have to negotiate a compromise. But Senate Democrats, who control that chamber, balked at such talks.

“I will not reopen negotiations until the House follows through and passes this agreement that was negotiated by Republican leaders and supported by 90 percent of the Senate,” said Senate Majority Leader Harry Reid of Nevada.

The $33 billion Senate package also would extend for two months the current Medicare payment rates to physicians and up to 99 weeks of unemployment benefits for long-term jobless workers. It would be funded by higher fees charged by mortgage giants Fannie Mae and Freddie Mac.

The plan got substantial Republican support, and Monday, some GOP senators were angry that the House was balking.

“The House Republicans’ plan to scuttle the deal to help middle-class families is irresponsible and wrong,” said Sen. Scott Brown, R-Mass. “We cannot allow rigid partisan ideology and unwillingness to compromise to stand in the way of working together for the good of the American people.”

The House last week, on a largely party-line vote, approved extending the programs for a year. It paid for the package by other means, notably a federal pay freeze. And it gradually reduced the maximum number of weeks from 99 to 59.

Debate was sharp and largely partisan Monday.

Republicans contended that two months would not provide employers or consumers with enough certainty to hire and spend.

“I was elected to fight for sustainable policies, not a short-term one,” said Rep. Renee Ellmers, R-N.C.

“We are going to stay here and do our work until we guarantee that no one faces a tax increase in the year ahead,” insisted House Majority Leader Eric Cantor, R-Va. “No one – middle-class families, workers, employers, doctors – needs more uncertainty in this tough economy, and Washington must not ignore them.”

Democrats saw a big political opportunity – a chance to paint Republicans as lawmakers who “will ring in the New Year with a tax hike of their own making,” said Rep. Gerald Connolly, D-Va.

“We are witnessing the concluding convulsion of confrontation and obstruction from the most unproductive, tea party-dominated, partisan session of the Congress,” said House Minority Whip Steny Hoyer, D-Md.

“I say to each and every member of the House, unless they have a plan they think can get 218 votes (a majority) over here, can pass without a filibuster in the Senate and get signed, there is no responsible vote except ‘Yes,’ ” Hoyer said.

The Senate concluded its 2011 work Saturday, believing the House would vote this week for the plan. But later that day, Republican House members rebelled during a call with Boehner and other GOP leaders.

Boehner’s fervent opposition was somewhat of a surprise. He had praised one aspect of the proposal: A provision to expedite review of the Keystone XL oil pipeline, a 1,700-mile project that would stretch from western Canada to the Gulf Coast.

The Obama administration had delayed consideration until 2013. Republicans wanted a review within 60 days, and got that in the bill.

Monday, Boehner said it was “not true” that he had supported the entire plan.

“What I was outlining (Saturday) was the fact that having the Keystone pipeline in here was a success,” he said. “But I raised concerns about the two-month process from the moment I heard about it.”