Boehner Demands Year-Long Tax Cut, Challenges Senate to Heavier Lift

Under the gun from his Republican caucus and unwilling to let the Senate off the hook, House Speaker John Boehner on Monday said the House GOP will reject a two-month payroll tax cut bill that does nothing to help businesses plan or Americans save.

House leaders were planning a vote for Monday night, but delayed voting until Tuesday to approve a larger package than the Senate-passed legislation, whose price tag is $33 billion and which allows for the Social Security tax rate to stay at 4.2 percent from 6.2 percent for another two months instead of the year that most members prefer.

"Doing a two-month extension instead of a full-year extension causes uncertainty for job creators," Boehner said in remarks to reporters. "I used to run a small business. I met a payroll, I hired workers. A two-month extension creates uncertainty and will cause problems for people who are trying to create jobs in the private sector."

House GOP members say the Senate bill is weak and "kicks the can down the road," and Boehner said he wants to come up with a compromise the old-fashioned way -- in a conference of House and Senate lawmakers.

"I expect the House to take up legislation that reinforces the need to extend the payroll tax relief for a full year," he said. "I expect that the House will disagree with the Senate amendment and instead vote to formally go to conference -- the formal process in which the House and Senate can resolve differences between the two chambers between our two bills."

More On This...

The Ohio Republican is catching it from both sides as he moves on the endgame. As he defends his caucus' support for a longer extension in the payroll tax cut, 39 Republican senators, along with 50 Democrats, approved the short-term compromise on Saturday, and at least two GOP senators have urged the House to go along and get along.

"During this time of divided government, both parties need to be reasonable and come to the negotiating table in good faith. We cannot allow rigid partisan ideology and unwillingness to compromise stand in the way of working together for the good of the American people," said Sen. Scott Brown, R-Mass.

And Senate Democratic Leader Harry Reid says he's not willing to budge.

"I will not re-open negotiations until the House follows through and passes this agreement that was negotiated by Republican leaders, and supported by 90 percent of the Senate," Senate Majority Leader Harry Reid said. "I have always sought a year-long extension. I have been trying to forge one for weeks, and I am happy to continue negotiating one once we have made sure middle-class families will not wake up to a tax increase on January 1st."

A conference where members can blend differences from their chambers' respective bills can't happen unless the leaders appoint conferees. Saturday's vote in the Senate was expected to be the last one of the year, and they have no plans to return to Washington before the next session in January. They add that they considered the Senate bill a bipartisan compromise. It passed 89-10.

"We're not coming back," added a Democratic aide. "They should pass the two-month, and we start negotiating the year-long."

The Senate has not adjourned for the year, however, and remains in will be in pro-forma sessions, which are designed to meet the constitutional requirement that if they don't adjourn, they meet every few days. Making a return more complicated is the approval needed from all 100 senators to let the Senate hold any votes before the chamber's late January return.

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.

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.

Attached in the Senate bill was a "sweetener" for the GOP, which requires President Obama to sign off on a Keystone XL pipeline plan in 60 days or deem it not in the U.S. interest.

Obama had previously said he would make no decision on the Canada-to-Texas 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.

Other sweeteners could be added if the sides did go to conference.

Added to the chaos is the complaint from payroll companies, who have already started setting withholding tables for next year. If an agreement can't be resolved by the end of the year, many will get hit with a payroll tax increase on Jan. 1.

Senate Republican Leader Mitch McConnell has offered some support for Boehner despite others' claims that Boehner and he agreed to let McConnell settle the score in the Senate and then the House would accept their fate.

Nonetheless, McConnell spokesman Don Stewart on Sunday 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.

"They passed a bill, we passed a bill, now they have to work out the differences," a McConnell aide added on Monday.