Republican leaders face stiff resistance on extending payroll tax cut

House Republican leaders plan to add two of their own priority bills to a year-end legislative package that would extend the payroll tax cut and unemployment insurance benefits.

The GOP leaders outlined the tentative plan to rank-and-file members during a closed-door conference meeting Friday morning, where they pressed their divided conference to support extending two of President Obama’s top jobs proposals.

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In a bid to win conservative support and force Democrats’ hands, Republicans would include measures to speed up a federal decision on the Keystone oil sands pipeline and delay certain Environmental Protection Agency regulations.

Yet Speaker John Boehner (R-Ohio) still faces significant resistance from many conservatives, lawmakers said.

Several Republicans stood up in the meeting to oppose the extension of the payroll tax cut, citing concerns about Social Security and the fact that GOP leaders want to pay for one year’s worth of spending and tax relief over a decade.

GOP leaders presented what one lawmaker called “a buffet” of options to pay for the legislation, including several items that have long been part of deficit-reduction talks. Those include federal pay freezes and workforce reductions.

As it stands, the Republican rank and file will likely mull the leadership presentation over the weekend and perhaps provide feedback to GOP leaders, according to lawmakers and Republican leadership aides.

That would mean the earliest a legislative package would be introduced would be Monday, pushing a vote back until at least Wednesday.

Under House rules, a bill must be available three calendar days before it is voted on.

The legislative package would also fix the Medicare reimbursement rate for doctors, another year-end priority.

Some conservatives in the meeting balked at the ideas, and Boehner faces yet another uphill fight to persuade his members to compromise with Democrats. Republicans are facing intense pressure from the White House, which is accusing them of wanting to violate their party orthodoxy and allow a tax increase on working Americans.

“There was not a contentious debate, but there is a lot of uncertainty that is ubiquitous throughout the conference,” a critic of the payroll tax holiday, Rep. Trent Franks (R-Ariz.), said.

Franks said he felt sympathy for Boehner, whom he said had been dealt “an impossible hand” politically by Obama.



“His pressure was in the force of his intellect given the totally untenable position he’s in with this president,” Franks said. “This president seems to think the Congress can repeal the laws of mathematics, and he’s an absentee chief executive.


“The bottom line is, John Boehner, instead of being dealt five aces, he’s been dealt an impossible hand.”

Obama on Friday kept up the pressure, saying Congress needed to pass the extensions before it left town for the holidays. “I expect that it’s going to get done before Congress leaves. Otherwise, Congress may not be leaving, and we can all spend Christmas here together,” Obama said.

Rep. John Campbell (R-Calif.) said the GOP leaders did not appear prepared for the push-back from their members.

“I think they were a little surprised by the push-back, they looked a little deflated to me,” he said, before noting his opposition to extending any of the expiring provisions.

In interviews after the meeting, Republican leaders voiced frustrations that took several forms. Many criticized the temporary nature of the tax relief, saying it was a poor substitute for comprehensive tax reform. Others said they doubted claims that the payroll tax could be tinkered with without undermining the entitlement programs it funds, even if it is paid for with spending cuts. And several Republicans said a plan to pay for the programs over the course of 10 years only exacerbated the debt problem that congressional leaders have spent a year trying to solve.

“It’s kind of like the Wimpy thing — 'I will gladly pay you tomorrow for a hamburger today,' ” freshman Rep. Allen West (Fla.) said.

West said he told leadership that he did not want to see the five different items bundled into the same bill.

“I think we need to tackle these things individually,” West said. “I’m just not sold on this payroll tax extension and this unemployment extension. Because we’re broke.”

Asked how widespread the opposition was, West replied: “I don’t think I’m the minority.”

Several Republicans said afterwards they were skeptical of the payroll tax holiday because it could hurt Social Security, and expressed a reluctance to give the president a victory.

“There is a sense that we should not be taking from seniors just to give to someone who is fortunate enough to have a job,” Rep. Scott Garrett (R-N.J.) said. “There are better ways to help the economy … than some of the ideas that the Democrats and the president has suggested so far.”

Some Tea Party-backed members offered alternatives.

Rep. Jeff Landry (R-La.) at the meeting proposed a bill that would condition the payroll tax holiday on recipients agreeing to allow their Social Security retirement age to rise. He said afterwards that leaders did not “embrace” his idea.

As to the leadership’s proposal, Landry said: “I have a dilemma.

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“One side of me says, I certainly want Americans to keep more of their hard-earned money, but on the other, I don’t want to jeopardize the entitlement programs that this dedicated tax pays for,” he said. “It’s like doing something good for them today, but bad for them tomorrow.”

Rep. Mick Mulvaney (R-S.C.) said he proposed a reduction in the marginal tax rate in lieu of the payroll tax holiday.

“We are trying to find a way to get everyone on the same page,” House Ways and Means Committee Chairman Dave Camp (R-Mich.) said. “A lot of members have different ideas and we are taking a look at them.”

Any efforts to change the Defense cuts triggered in 2013 by the failure of the deficit supercommittee have been pushed aside for now, House Armed Service Committee Chairman Buck McKeon (R-Calif.) said.

Adding legislation to speed up approval of the controversial Keystone XL oil sands pipeline could make it tougher for Democrats to support the tax-cut extension.

House Democratic leaders panned the idea immediately.

"This is evasive," Minority Leader Nancy Pelosi (D-Calif.) said during a brief press conference in the Capitol. "They're taking a circuitous route to nowhere."

The Obama administration last month punted a federal decision on a permit for TransCanada Corp.’s proposed Alberta-to-Texas pipeline until 2013 — notably, after the presidential election.

But Rep. Lee Terry’s (R-Neb.) plan — along with separate Senate legislation — would require a much faster decision on the proposal to carry hundreds of thousands of barrels per day to Gulf Coast refineries.

Republicans plan to attach language targeting pending EPA rules limiting harmful air pollution for industrial boilers and incinerators.

The regulations have come under fire from industry groups, Republicans and some centrist Democrats, who argue that the rules will impose a massive burden on the economy. The House voted in October to delay the implementation of the rules.

Amid criticism from industry and the GOP, EPA announced revised boiler regulations Friday that the agency said gives industry more flexibility in meeting the standards. EPA said the revised regulations only apply to about 1 percent of the country’s boilers.

—Ben Geman, Andrew Restuccia, Mike Lillis, Bernie Becker and Alicia Cohn contributed to this story.

This story was first posted at 11:51 a.m. and last updated at 3:54 p.m.