By Mike Lillis and Bernie Becker - 12/02/11 07:20 PM EST
House Minority Leader Nancy Pelosi on Friday rejected Republicans' move to add several GOP sweeteners to an end-of-the-year tax bill.
The California Democrat said the Republicans' push to attach provisions expediting a decision on the Keystone oil pipeline and rolling back environmental protections is a waste of time that Congress can't afford.
The comments arrive as leaders in both parties are scrambling to pass a legislative package to extend the payroll tax holiday, extend unemployment insurance benefits and prevent steep pay cuts for doctors who treat Medicare patients. The process hit a brick wall Friday when a number of rank-and-file Republicans informed leaders that they oppose an extension of the payroll tax holiday, a central tenet of President Obama's jobs agenda.
Pelosi suggested leaders could pay for the package using overseas war funding – a controversial budget maneuver because the expected drawdown of troops means the money would likely never be spent.
"It has been something that Republicans have used in their budgeting, so I think if there's anything that is important it is the economic security of America's families, and we could use it [the war funding] to extend the payroll tax and remove all the uncertainty in the SGR [the Medicare doctor fix]," Pelosi said.
"This money, this account, has over $1 trillion in it, and it wouldn't take half of it to cover what we're talking about."
Joined Friday by House Minority Whip Steny Hoyer (D-Md.), Pelosi also accused Republicans of defending the rich at the expense of the middle class.
"If we have to pay for the payroll tax cut we're perfectly willing to do that," she said, "even though the Republicans never want to pay for the tax cuts for the wealthiest people in our country."
Rep. Dave Camp (R-Mich.), chairman of the Ways and Means Committee, said the process remains very much in flux.
"We haven't figured out how all of this is going to come to the floor, that's going to be a leadership decision," he said Friday.
Camp also pushed back against the notion that Republicans would pay for only part of the costs of the tax and Medicare package.
"I think we'll find a way to pay for everything," he said.
Rep. Richard Neal (D-Mass.) said he thought Republicans would eventually have pare their proposal down and move in the Democrats’ direction.
“Then you’ll get to the kind of crystallized view of who’s where,” said Neal, a senior Democrat on the House Ways and Means Committee. “My hunch is that Speaker [John] Boehner understands what the national polling means here."
But, even if their divisions might not be as stark, Democrats are not without their own splits on the payroll tax — with more than a few lawmakers expressing concern about the impact the tax break has on the Social Security revenue stream.
Rep. Peter DeFazio of Oregon, one of the more strident Democratic critics of the payroll tax cut in recent months, remains unsure about the proposal.
“If it’s offset with a millionaire tax, I have less concern about it,” DeFazio said.
But DeFazio’s still not a big fan of borrowing money from the general fund to replace lost revenue for Social Security, and is unconvinced of the payroll tax cut’s economic benefits.
“I’d rather borrow the money and solve our problem on funding our surface transportation bill, put a few million people to work, rather than continuing a payroll tax cut which is not giving us any jobs,” DeFazio said.
The Senate on Thursday shot down two competing proposals to extend the payroll tax holiday. The Democrats' plan failed by a vote of 51-49, while the GOP's counter-offer fell 20-78.
Three Democratic senators voted against their party’s payroll tax proposal, while 27 Republicans opposed the GOP plan.