House GOP threatens to kill payroll tax deal in Monday vote

House Republicans signaled over the weekend they are prepared to reject a bipartisan deal to extend the payroll holiday and hand President Obama a major defeat before Christmas.

Whether they follow through on the threat will be revealed Monday evening, when House lawmakers vote on a motion to concur with a two-month extension of the tax break hammered out by Senate leaders.

House Speaker John Boehner (R-Ohio) said Sunday he and his rank-and-file colleagues oppose the deal even though 39 Republicans in the upper chamber, including Senate Republican Leader Mitch McConnell (Ky.), voted for it this weekend.

“It’s pretty clear that I and our members oppose the Senate bill,” Boehner said on NBC’s  “Meet the Press”.

Boehner faulted the Senate for extending payroll tax relief for only two months after the House passed legislation to prolong it for a full year, the length Obama requested of Congress.

“How can you do tax policy for two months?” Boehner asked. “I believe that two months is just kicking the can down the road. The American people are tired of that."

Fox News reported Sunday evening that it had obtained a House GOP leadership email informing rank-and-file members to expect the Senate payroll tax measure to go down in defeat.  

House Republicans have demanded the cost of the tax holiday, as well as accompanying provisions to extend unemployment benefits and freeze scheduled cuts to doctors’ Medicare payments, not be added to the federal deficit.

Extending those policies for another year, however, would cost around $200 billion. Finding ways to pay for it has reopened the debate over spending cuts and taxes that stymied Congress for much of the year.

Democrats have agreed to $100 billion to $200 billion in spending cuts identified as potential savings by the deficit-reduction supercommittee this fall. That leaves negotiators about $90 billion short of paying for the full package.

Democrats want to cover the gap by closing tax breaks for wealthy earners and corporations. They would also prefer to count savings from winding down the wars in Iraq and Afghanistan.

Republicans reject those options in favor of more cuts to federal spending.

Democrats refuse to accept deeper spending cuts, knowing they need to find $600 billion in additional non-defense reductions next year because of the Budget Control Act. 

White House communications director Dan Pfeiffer acknowledged Sunday the president asked for a yearlong extension but urged Congress to pass a stopgap measure to spare an estimated 160 million people from a tax hike in January.

He said House Congress “should pass the two-month extension now to avoid a devastating tax hike from hitting the middle class in just 13 days.”  

“It’s time House Republicans stop playing politics and get the job done for the American people,” he added.

Senate leaders do not think they can bridge the partisan differences in the next two weeks. Senate Majority Leader Harry Reid (D-Nev.) said House Republicans will cause taxes to go up if they scuttle the Senate-passed deal.

"Senator Reid has been trying to negotiate a yearlong extension of the payroll tax credit with Republicans for weeks,” said Reid spokesman Adam Jentleson in a statement. “He is happy to continue negotiating a yearlong extension as soon as the House passes the Senate's short-term, bipartisan compromise to make sure middle class families will not be hit by a thousand-dollar tax hike on January 1.”

Jentleson said Reid does not plan to bring the Senate back in session next week, even if the House rejects the bipartisan compromise to extend the payroll tax holiday.  

Boehner has called on Democrats to agree to a bicameral conference to merge the Senate legislation with a House-passed bill extending the payroll tax holiday for a full year. House GOP leaders would pay for it by freezing federal pay, restricting benefits for illegal immigrants and increasing Medicare premiums for the wealthy.

Senate Democratic leaders and the president were caught by surprise Sunday when Boehner declared his opposition to the Senate compromise. 

Obama said Saturday that he was “looking forward to the House moving forward and getting this done when they get back on Monday.”

Senate leaders believed McConnell had negotiated the compromise legislation on Boehner’s behalf, and accused the Speaker of acting in bad faith.

"Last week, Speaker Boehner sat in a meeting with Leader Reid and Leader McConnell and he gave Leader McConnell his proxy to negotiate a bipartisan compromise. He made public comments promising to live by whatever agreement the Senate reached. He said, 'If the Senate acts, I’m committed to bringing the House back — we can do it within 24 hours — to deal with whatever the Senate does,'” said Sen. Charles Schumer (N.Y.), the third-ranking member of the Senate Democratic leadership. 

"The Senate came to a deal, and now Speaker Boehner must keep his word,” he said.

Michael Steel, Boehner’s spokesman, denied Schumer’s characterization of the meeting.

“That is not true,” he said.

GOP aides noted that Schumer did not attend the Wednesday meeting with Reid, Boehner and McConnell.

McConnell’s spokesman on Sunday defended Boehner’s proposal to convene a Senate-House conference to modify the Senate compromise that his boss had negotiated less than 48 hours earlier.

“The House and the President both want a full-year extension. The best way to resolve the difference between the two-month extension and the full-year bill, and provide certainty for job creators, employees and the long-term unemployed, is through regular order, as the Speaker suggested,” McConnell’s spokesman, Don Stewart, said Sunday.

Russell Berman contributed to this report.