Obama Urges House to Pass Senate Tax Cut Bill, as Republicans Stand by Call for New Talks

The White House is pressing House Republicans to immediately take up the Senate-passed extension of the payroll tax cut, claiming the two-month measure is "the only option" to ensure middle-class families aren't hit with a tax increase at the beginning of 2012.

President Obama, engaging in shuttle diplomacy in a bid to break a congressional stalemate, made separate calls Wednesday to House Speaker John Boehner and Senate Democratic Leader Harry Reid. According to White House Press Secretary Jay Carney, the president urged Boehner to take up the Senate bill and "work out a full-year solution" once that's done.

"There's a clear avenue here," Carney said. "They're shining a light on the path out of this cul-de-sac that they've driven themselves into. And it is to vote on (the Senate bill)."

The Senate bill passed over the weekend with broad bipartisan support. But House Republicans complained that it only was good for two months, and they pushed instead for a separate version they passed earlier that would extend the payroll tax cut through 2012. The House voted in favor of launching a compromise process Tuesday, though it did not technically hold an up-or-down vote on the Senate bill.

As of Wednesday, leaders of both parties were calling on each other to come to the table and work out a solution. But each side is sitting at a completely different table.

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    On the Republican side, lawmakers want Reid to appoint negotiators who can work with the House on hammering out a compromise package. House Republicans began to meet on this possibility Wednesday -- however, they had no Democrats present with whom to negotiate.

    A Boehner aide said that on the phone call with Obama, the speaker "reminded the president that the House is the only body that had done what he asked for by providing a full year of payroll tax relief and extended unemployment benefits."

    "The speaker told the president that his conference was elected to change the way Washington does business and that we should not waste the next 10 days simply because it is an inconvenient time of year," the aide said.

    On the Democratic side, lawmakers want the House to approve the Senate bill and then return to the negotiating table about a longer-term package early next year. However, Republicans adjourned the House on Wednesday before Democrats could call for a vote on the Senate bill.

    That incident had House Minority Whip Steny Hoyer and other Democrats fuming. Hoyer was cut off by the presiding Republican in the House just as he was trying to push for a vote on the Senate bill.

    "You're walking out," Hoyer said as officials left the chamber. "You're walking away. Just as so many Republicans have walked away from middle-class taxpayers."

    Each party is accusing the other of preventing a tax cut deal.

    House Democratic Leader Nancy Pelosi on Wednesday wrote a letter to Boehner urging Republicans "not to walk away from the American people again."

    Reid also urged Boehner in a letter Wednesday to bring members back to vote on the Senate bill.

    But as the standoff unfolds, most of Washington has left town for the holidays, participating in a mass exodus Tuesday night after a partisan vote to reaffirm the House position for a year-long extension to the payroll tax cut.

    House Republican Leader Eric Cantor told Fox News that the ball is in the Senate's court.

    "We're sitting here on the ground in Washington, waiting for the Democrats to come and do their work," Cantor said Wednesday. "The truth is, the bill is back in the Senate now."

    The House and Senate are in pro-forma session, which in effect means they haven't adjourned but have sent everyone home until they have reason to reconvene and take action.

    Still, Cantor said, with 10 days left in the year and an obvious wall between the House and Senate, lawmakers need to sit down.

    "We can get there," Cantor said Wednesday.

    "Our Republican strategy is pretty simple, we're going to stay here and get the work done now," Rep. Kevin Brady, R-Texas, a conferee, told Fox News. "Get the job done first, vacation later and that's our message to the president."

    Obama is also left in limbo, as his family goes on vacation to Hawaii and he remains in Washington, insisting the House take action to approve the Senate legislation and refusing to leave until a deal is struck.

    On Monday, the Treasury Department insisted that while a year-long extension of the payroll tax is preferable, a short-term cut is doable.

    "While any short-term extension is bound to create some administrative complications, it is feasible to implement the bipartisan Senate bill, and the Treasury Department will work with employers to ensure the smoothest possible implementation," said Jenni LeCompte, a Treasury spokeswoman.

    Without a deal, Social Security taxes return to their 2010 rate of 6.2 percent. In 2012, that is on the first $110,000 of income. For households making $50,000 a year, that's the equivalent about an extra $1,000.

    While proponents like the White House say $40 a paycheck helps a lot of people afford a lot of items, critics say the cut does nothing to inspire hiring, and is merely a battle over which party gets to claim the mantle of tax-cutting.

    The legislation doesn't just provide $19 a week in extra income. Both the House and Senate restore cuts to Medicare doctors' fees that are set to expire on Jan. 1, and they extend unemployment benefits for another year.

    Trying to find a fix for the doctor payment cuts, Medicare announced Tuesday that, as it has in the past when doctors' reimbursements have been cut through congressional inaction, it would withhold physicians' payments for two weeks. The hope is that the problem gets fixed by then.

    But given the intransigence on both sides, the leverage to an endgame may just be the ticking clock.

    "We're here. We're ready to extend those payroll tax cuts," Brady said. "The issue is will Democrats end their vacations and come back with us to solve that problem? Will the president insist that Democrats end their vacations and do their jobs first?"