House GOP set to scuttle tax deal

WASHINGTON - Under fire from senators in their own party, House Republicans on Monday prepared to reject a Senate measure to extend a payroll-tax cut and unemployment benefits for millions of Americans for two months, and demanded the Senate reopen negotiations over the benefits.

Democrats, however, imagining the political wind at their backs, said they would not return to the Capitol to negotiate further until the House passed the short-term bill, one that Sen. Mitch McConnell of Kentucky, the Republican leader, negotiated and voted for, along with 38 other Republican senators Saturday.

"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," Majority Leader Harry Reid said in a statement. "This is a question of whether the House of Representatives will be able to fulfill the basic legislative function of passing an overwhelmingly bipartisan agreement, in order to protect the economic security of millions of middle-class Americans."

The House had planned to vote on the two-month payroll-tax bill Monday night. But after a two-hour meeting of their caucus, House Republican leaders postponed the floor debate and the vote until Tuesday.

"The votes will take place tomorrow in the light of day," said Rep. Kevin McCarthy of California, the No. 3 House Republican.

Speaker John Boehner (R., Ohio) said he was confident that he had the votes to reject the Senate version of the bill.

The standoff leaves Boehner ending the year exactly where he began, in the middle of a nasty fiscal fight with Senate Democrats and his conservative freshmen in revolt, making it difficult to find a middle ground between mollifying the needs of his conference and coming up with legislation to avert disaster.

But Boehner said repeatedly Monday that he believed a deal for a one-year extension could still be struck, even with the Senate essentially adjourned for the year and the tax break set to expire Jan. 1.

"I don't believe the differences are that significant that we can't do this for a whole year," he said. "Why punt this until the end of February when we can just do this now and get it over with?"

A core group of conservative House members, many of them newcomers, have balked all year at short-term spending agreements, including proposed legislation to raise the debt ceiling. It remained far from clear Monday night how, or whether, the tax cuts would be extended for 160 million workers and millions of unemployed Americans would continue to get jobless benefits next year.

"We are witnessing the concluding convulsion of confrontation and obstruction in the most unproductive, tea-party-dominated partisan session of the Congress - the most partisan of which I have participated," Rep. Steny H. Hoyer of Maryland, the No. 2 House Democrat, said Monday. He has served in Congress for three decades.

The impasse began over the weekend when House Republicans said they would reject the Senate measure, which passed, 89-10. It would, for two months, extend the payroll-tax cut, continue unemployment benefits, and prevent a cut in fees paid to doctors who accept Medicare, and it would allow lawmakers and the White House time to work out their differences on how to pay for a yearlong extension.

Many rank-and-file Republicans have questioned the underlying concept of continuing the tax break - because the payroll-tax reduction would shrink the flow of revenue to the Social Security trust fund, which would be replaced by payments from the Treasury. But House Republican leaders said Monday their objection was not to the tax cut itself, but to the temporary nature of the fix.

"We don't need to be governing in two-month increments," said Rep. Eric Cantor (R., Va.), majority leader. "People can't live their lives like that."

Boehner, who said he never assured the Senate that such a package would pass his chamber, did insist on and win a sweetener provision that would speed the review process for construction of an oil pipeline from Canada to the Gulf Coast. But while Boehner called the provision a "victory" in a conference call with House members over the weekend, it was insufficient to persuade House Republicans to accept the Senate bill.

With Republicans moving ahead with their plans to block the bill, some of their counterparts in the Senate issued strong rebukes of fellow Republicans across the Capitol Rotunda.

"The House Republicans' plan to scuttle the deal to help middle-class families is irresponsible and wrong," said Sen. Scott P. Brown (R., Mass.), echoed by Republican senators.