Breaking: Deal near on payroll tax cut extension? Update: 90 days?

posted at 12:00 pm on December 22, 2011 by Ed Morrissey

Have Republicans and Democrats — or more precisely, Republicans and Republicans — resolved the standoff over the payroll tax cut extension?  Nothing is breaking on the news websites as of yet, but political reporters are all, er, atwitter over leaks that a face-saving resolution might have been reached.  The deal would have the House GOP agreeing to a 60-day extension, but the Senate agreeing to go to a conference committee after the break to resolve the differences between the House one-year extension and the Senate bill.

Ed Henry of Fox News has been tweeting about the rumors:

President basically told Boehner, if you pass two-month extension Democrats will move forward on talks over one-year deal …

This is big morning in this story: now have the outline of a deal; if Boehner passes two-month extend, Reid appoints conferees on 1-yr deal

It’s not much of a concession for Obama, but then again, he didn’t need to move much after Mitch McConnell publicly called on the House to pass the Senate bill, although he also foreshadowed the deal:

Senate Republican Leader Mitch McConnell on Thursday urged House Republicans to pass a two-month extension of the payroll tax cut, putting greater pressure on House Speaker John Boehner (R-Ohio) to act.

McConnell said House passage of a Senate-approved payroll tax relief package “locks in” legislative language requiring President Obama to speed up his timetable for approving the Keystone XL oil sands pipeline.

The bipartisan Senate package also includes a two-month extension of unemployment benefits and a two-month freeze of scheduled cuts to doctors’ Medicare payments. The cost of the package is offset by increasing fees at Fannie Mae and Freddie Mac, cutting about $3 billion from the deficit.

McConnell also backed Boehner’s demand that Senate Democrats should appoint conferees to negotiate a yearlong extension of the payroll tax extension with the House.

Obama has tentatively scheduled a statement for 1 pm ET today, which sounds as if there has been a resolution … assuming Boehner can deliver it.  We’ll keep our eyes open for updates to this story.

Update: It’s being widely reported that Boehner tried to get Obama to reopen negotiations, but ended up with a refusal:

“The speaker explained his concern that flaws in the Senate-passed bill will be unworkable for many small business job creators,” an aide to the Ohio Republican said. “The president declined the speaker’s offer.”

According to the White House, Obama repeated on the phone call his belief that the “only viable option currently on the table” to prevent a tax increase for 160 million American workers is the Senate-passed, two-month extension. But Obama pledged to work with the House on a full-year extension once the Senate package is approved.

This deal is mostly a face-saving maneuver.  The only real concession is that Reid will agree to use the conference committee process rather than demand identical passage, which has some significance, but not whole lot.  It means that the GOP still have to agree to the shorter-term extension and negotiate for the one-year extension, which is precisely what was going to happen anyway.

Update II: Fox News reports that one “top House Republican” wants to compromise on a 90-day extension:

A top House Republican suggested Thursday that Congress could extend the payroll tax cut for three months as a potential compromise between the yearlong extension backed by the House and the two-month measure approved by the Senate. …

Meanwhile, Michigan Republican Rep. Dave Camp said in an interview on CNBC Thursday that a three-month extension could at least help employers with their quarterly reports.

It’s unclear whether the White House or Senate Democrats would be open to a three-month measure. Boehner too pushed back on the idea when asked about it at the GOP press conference, though he didn’t definitively rule it out. He said “nothing” can happen until House lawmakers have somebody on the Senate side with whom to negotiate.

There are two very large problems with that offer.  First, it makes minced meat out of the Republican objection to the 60-day extension over a year-long extension.  What’s the difference?  The problems cited by payroll management firms would be relatively equal between the 60- and 90-day extensions.  Second, it would mean that the Senate would have to return to pass a different bill with the 90-day extension.  If they were going to do that, the GOP could have just stuck with the demand for a one-year extension.

This is getting worse and worse for House Republicans.  If they are okay with a short-term extension, then they should pass the bipartisan Senate bill and go home already.


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