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Payroll tax trouble looms

Congress heads toward standoff

WASHINGTON — Partisan to the core, Congress careened toward a holiday-season standoff Monday on legislation to prevent a Social Security payroll tax increase for 160 million workers on Jan. 1.

“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,” said Speaker John Boehner, R-Ohio. A House vote was set for today to seek negotiations on a compromise to renew the cuts through 2012, a rejection of the bipartisan two-month extension that cleared the Senate over the weekend.

In an acid response, Senate Majority Leader Harry Reid accused Boehner of risking a tax increase for millions “just because a few angry tea partiers raised their voices.” The Nevada Democrat ruled out new negotiations until the two-month measure is enacted.

That left the two parties approaching Christmas-week gridlock over an effort to pass core elements of President Barack Obama’s jobs program — renewal of the tax cuts and long-term unemployment benefits — that Republican and Democratic leaders alike say they favored.

It was the latest and likely the last such partisan confrontation in a year of divided government that brought the Treasury to the brink of a first default last summer, and more than once pushed the vast federal establishment to the edge of a partial shutdown.

This time, Republican divisions were prominently on display.

The two-month measure that cleared the Senate, 89-10, on Saturday had the full support of the GOP leader, Sen. Mitch McConnell, who also told reporters he was optimistic the House would sign on.

The two-month extension was a fallback, and officials say that when McConnell personally informed Boehner and House Majority Leader Eric Cantor of the deal at a private meeting, they said they would check with their rank and file.

But on Saturday, restive House conservatives made clear during a telephone conference call that they were unhappy with the measure.

“I’ve never seen us so unified,” Rep. Louie Gohmert, R-Texas, said as he left a two-hour, closed-door meeting Monday night where Republicans firmed up their plans. He said the payroll tax cut that has been in effect this year failed to create any jobs, but favored extending it for another 12 months because “it’s tough to raise taxes when you’re in a down economy.”

But House Democratic leader Nancy Pelosi said Republicans were “walking away from a tax cut.” And Sen. Chuck Schumer of New York, a member of the party leadership, accused Boehner of “claiming to support something and then sending it to a legislative graveyard where it never sees the light of day.”

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