Reid, Boehner spar over payroll tax

Senate Democratic leaders said Friday they were crafting a backup plan to extend the payroll tax cut for an entire year, in case the conference committee tasked with coming up with a deal falls short.

In a conference call, Senate Majority Leader Harry Reid accused congressional Republicans of gumming up the works on the payroll tax by trying to tack unrelated issues on to an extension.

"I have great confidence in our conferees, but I'm not going to stand by when the GOP slows the process," the Nevada Democrat said.

Reid’s comments come as Democrats and Republicans on the conference committee, which includes 20 lawmakers, are widely seen to still be far apart on a variety of issues — including, perhaps most importantly, how to pay for whatever package they develop.

The statements also drew a quick rebuke from House Speaker John Boehner, with the Ohio Republican noting that the Senate has yet to pass its own full-year extension of the tax break, which would affect some 160 million Americans.

“It would seem those energies could be better directed toward the conference negotiations themselves, in which Senate Democrats have not actually presented a full plan,” Boehner said in a Friday statement. “You can’t have a ‘backup plan’ if you haven’t offered anything to back up.”

The House passed a yearlong extension in December, but it incorporated items that Democrats oppose and that Reid was presumably referencing with his Friday comments, including a delay of industrial boiler regulations and certain reforms to the federal unemployment insurance system.

GOP conferees would like to see some of those items tucked into a package extending the payroll tax cut for a full year.

The Senate passed a two-month extension of the tax break after being unable to pass a full year of the cut. House Republicans, after taking a political pounding, eventually accepted that idea, leading to the current conference committee.

In addition to the payroll tax cut, unemployment benefits for millions of Americans will also expire if lawmakers don’t act by Feb. 29, and doctors treating Medicare patients would see a 27 percent cut in their reimbursement rate.

For the most part, conferees have said they want to see those three items extended for a full year.

But the conference committee, which will meet again on Tuesday, has also spent much of its time discussing issues in other areas, such as the Keystone XL oil sands pipeline and expired tax provisions.

The two sides also have separate visions on how to pay for any extension, as illustrated by the Friday statements from Reid and Boehner.

Reid reiterated that a surtax on millionaires could be used to pay for the tax relief, an idea embraced by other Democrats but that has failed to make it out of the Senate on multiple occasions.

Boehner, meanwhile, noted that a federal pay freeze, one of the GOP’s preferred offsets, easily passed the House this week.

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