House GOP Defeats Payroll-Tax Cut

Today House Republicans rejected a bipartisan Senate compromise to extend a payroll-tax cut for two months, along with unemployment benefits, the Washington Post reports. This creates serious uncertainty about the fate of the tax cut enjoyed by 160 million American workers.

With a vote of 229 to 193, the House set aside the Senate bill and requested a formal conference with the Senate, setting up a showdown with the Democratic-controlled Senate and President Obama, who has demanded that the House approve the short-term plan now to avoid a Jan. 1 tax hike.

The House passed a motion to reject a Senate bill (which passed with bipartisan support in the Senate, with 89 votes) to extend the payroll tax for two months. That bill would have extended it for two months to buy Congress more time to negotiate the long-term details of how to extend it for a full year.

House Speaker John Boehner says that House Republicans will not accept a fix for just two months. They say they want to fully get the job done by extending the payroll-tax cut for a year — with a number of provisions attached.

That's why many have pointed out that this debate is not really about extending the payroll-tax cut; rather, it's about what Democrats are willing to give Republicans in exchange for it.

Boehner says that the House will now go into its planned recess but will return if the Senate agrees to reopen talks around a yearlong extension of the cut.

Meanwhile, Senate Majority Leader Harry Reid is saying that he and Senate Minority Leader Eric Cantor already negotiated a deal, and he will not reopen negotiations unless the House first passes their bill.

With less than two weeks left before the deadline, both sides are playing chicken. And the people who will suffer the consequences — if Congress refuses to vote on either a two-month-long or a yearlong extension — are working Americans. 

Read more at the Washington Post.

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