Boehner: House Will Reject 2-Month Payroll Tax Cut

WASHINGTON (AP) -- The House intends to vote down a bipartisan two-month extension of the payroll tax cut that has cleared the Senate and is backed by President Barack Obama, and request immediate negotiations on a full-year renewal, Speaker John Boehner said Monday.

"It's time to stop the nonsense. We can resolve these differences and we can do it in a way that provides certainty for job creators and others," Boehner said at a news conference, although he provided no estimate on how long it might take to produce a compromise.


Without action by Congress, both the payroll tax cut and a program for long-term unemployment benefits will expire on Jan. 1.

House Majority Leader Eric Cantor, R-Va., said lawmakers would not let the tax increase kick in but he did not say how they would resolve the dispute.

"In this tough economy, middle class Americans need to know that their taxes won't be going up at any point next year," Cantor said in a statement. "We are going to stay here and do our work until we guarantee that no one faces a tax increase in the year ahead."

The leaders' comments came after a chaotic weekend in which Senate leaders first failed to agree on a full-year bill, then coalesced around the two-month-extension that passed overwhelmingly, only to spark a revolt among GOP conservatives in the House.

There was no immediate reaction from either the White House or leaders in the Senate, which adjourned for the year on Saturday shortly after approving its version of the bill.

The revolt of the rank and file placed Boehner and Republicans in a difficult position, just as it appeared they had outmaneuvered Obama by assuring that the legislation would require him to make a swift decision on construction of a proposed oil pipeline.

Obama had announced he would put off the issue until after the presidential election in 2012 rather than decide the fate of a project that divided usual Democratic allies - environmentalists opposed and several labor unions in favor.

In a television interview shortly before Boehner's news conference, White House communications director Dan Pfeiffer accused Boehner of reversing his position on the two-month measure because of a "tea party revolt."

Boehner, R-Ohio, said he had not changed his view on the bill.

"I raised concerns about the two-month process from the moment I heard about it," he said.

He called on members of the Senate to "put their vacations on hold" and return to forge a compromise.

Obama has said repeatedly that Congress should not quit for the year until the tax cut has been extended, and has said he would postpone a planned Hawaiian vacation until the bill is finished.

GOP leaders planned House votes on the payroll measure for Monday evening.

Without congressional action, the payroll tax paid by 160 million workers would rise 2 percentage points on Jan. 1 - a boost that Democrats eagerly said would be the GOP's fault. The brinksmanship is a familiar pattern this year between the two parties, who have narrowly averted a federal default and several government shutdowns in past fights.

Extending the payroll tax cut and jobless benefits have been a keystone of Obama's and congressional Democrats' effort to spur a revival of the flaccid economy. Congressional Republican leaders also say they support the idea, but some of their rank-and-file remain unconvinced, saying the unemployment coverage is too generous and that cutting the payroll tax does not create jobs.

The Senate bill would cut the payroll tax, extend jobless benefits and avoid cuts in Medicare payments to doctors through February. Both sides say they want to renew all three for a full year, but bargainers have so far failed to agree on how to pay for a package that size, which could cost roughly $200 billion.

The White House's Pfeiffer said there was still an opportunity for House Republicans to avoid triggering a tax increase and for the chamber to pass the Senate-approved two-month extension.

"You only need a couple dozen Republicans to do it," Pfeiffer said. "I find it inconceivable that you can't get a couple dozen Republicans to vote for a tax cut for the middle class."

After Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., struck a deal on their two-month bill Friday night, McConnell expressed optimism that Congress would approve it and lawmakers would revisit the battle in February.

They expressed their views a day after House GOP lawmakers on a conference call voiced vehement opposition to the Senate bill, saying it lacked serious spending cuts. They also said they were tired of their leaders striking compromises and not battling harder for their positions, according to several participants.

Boehner did not specify the changes he would like in the bill, but touted "reasonable reductions in spending" and language blocking some Obama administration anti-pollution rules in a yearlong payroll tax bill the House approved last week. That bill covered its costs by carving savings from federal workers, higher-income Medicare recipients, fees paid to insure mortgages and elsewhere.

Reid and Schumer said Sunday that Boehner had asked McConnell and Reid to negotiate a compromise, seemingly suggesting that Boehner had walked away from a deal. Republicans said that is untrue and said the House GOP played no role in last week's bargaining between the Senate leaders.

McConnell offered support for Boehner Sunday. His spokesman, Donald Stewart, said the best way to "provide certainty for job creators, employees and the long-term unemployed is through regular order" - a term used to describe the normal process of negotiations between the House and Senate.

The Senate bill also includes a provision dear to Republicans that would force Obama to approve a proposed Canada-to-Texas oil pipeline within 60 days unless he declares the project would damage the national interest.

Obama had previously said he would make no decision on the Keystone XL pipeline until 2013, allowing him to wait until after next November's elections to choose between two Democratic constituencies: unions favoring the project's thousands of jobs and environmentalists opposed to its potential pollution and massive energy use. Obama initially threatened to kill the payroll tax bill if it included the pipeline language but eventually retreated.

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