U.S. House rejects Senate version of payroll tax cut

Wednesday, December 21, 2011

Yesterday, the United States House of Representatives voted to effectively reject the Senate version of a bill, passed with bipartisan support, to extend a payroll tax cut two months past its year-end expiration date. The House voted instead to create a conference committee to settle differences between members of both bodies.

The House rejected the Senate version of a bill that would extend a payroll tax cut for two months yesterday.
Image: Kevin McCoy.

Although the tax cut extension itself has support among Republicans and Democrats, lawmakers disagree on how Congress should go about compensating for the cost of extending the cut and the policy changes it would entail.

During an appearance yesterday, President Obama condemned opposition to the Senate-passed version of the bill, accusing Republicans in the House of trying to negotiate on matters unrelated to the bill. Republicans, in response, say there is still time to negotiate the bill, insisting that lawmakers ought to concentrate on a year-long plan rather than a two-month extension. Senate Democratic leader Harry Reid, however, says he will not agree to negotiate the tax cut extension until the Senate-approved bill is passed by the House.

If the tax cut is not extended and instead expires on December 31, approximately 160 million Americans will be affected by the tax increase; President Obama insists the only way to prevent the tax hike beginning January 1 is for the House to pass the Senate bill. In response, House Speaker and Republican John Boehner wants Obama to "call on the Senate to return" to negotiate. The Senate, shortly after passing the bill, adjourned for the Holiday break.

Also included in the bill is a provision that would require President Obama to make a decision regarding the construction of the Keystone XL pipeline, a pipeline that would transport oil from Canada to Texas.

House Democratic leader Nancy Pelosi blamed the congressional year-end impasse on "Tea Party Republicans." In a letter to President Obama, Speaker Boehner requested he galvanize the Senate to negotiate on the bill's provisions, writing "The differences between the two different bills can be quickly reconciled to provide the American people the certainty of a full-year bill. There are still 11 days before the end of the year, and with so many Americans struggling, there is no reason they should be wasted. You have said many times that Congress must do its work before taking vacation".

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This story has updates

See U.S. Congress reaches deal on payroll tax cut extension, December 23, 2011

Sources

Erika Bolstad. "U.S. House to U.S. Senate: We're not passing your payroll tax cut as-is" — The Miami Herald, December 20, 2011
Richard Rubin. "Obama-Boehner-Reid Showdown Makes Tax Cut Expiration Likely" — Bloomberg Businessweek, December 20, 2011
David Espo. "Obama blames GOP for upcoming tax increase" — Associated Press, December 21, 2011
Ewen MacAskill. "House overwhelmingly rejects two-month payroll tax cut extension" — The Guardian, December 20, 2011

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