By Alexander Bolton - 02/14/12 07:59 PM EST
Senate Republican Leader Mitch McConnell (Ky.) on Tuesday declined to endorse a proposal by House GOP leaders to extend the payroll-tax holiday for 10 months without paying for it.
McConnell had told reporters last week that Congress should not extend the 4.2 percent payroll-tax rate for the rest of the year by adding to the estimated $1.3 trillion federal deficit for 2012.
But the Senate GOP leader downplayed his differences with House Speaker John Boehner (R-Ohio).
“The conference appears to be going nowhere. The difficulty we’ve had going back to December is getting our friends on the other side to cut any spending anywhere,” he said in reference to the conference of Senate and House negotiators working on a compromise to extend the payroll-tax holiday, unemployment benefits and current-level Medicare payments to doctors for a full year.
“So there’s a high level of frustration within the conference, and I think diminishing optimism about the chances of the conference functioning,” he added. “So I can understand why the House leadership, exasperated with the lack of progress in the conference, is looking around at other alternatives.”
McConnell said last week that the payroll-tax cut should be paid for.
“We’ve added 43 percent to the national debt in the last three years,” he said. “We now have a debt the size of our economy, which looks a lot like Greece. At what point do we anticipate getting serious here about doing something about deficit and debt?
“We think we ought to pay for it. Regardless of whether these kinds of things have been paid for or not paid for in the past, we are where we are. We’re running another trillion-dollar deficit for the fourth year in a row.”
House Democratic leaders, though, indicated Tuesday that they would support the GOP’s stand-alone extension.
“We have long proposed bringing this tax cut to the floor without payfors,” said House Minority Leader Nancy Pelosi (D-Calif.).
But she cautioned that any stand-alone bill should not override the work of the conference committee working to hammer out an agreement.
Democrats had initially opposed House GOP efforts to separate the payroll-tax-cut extension from provisions to extend unemployment insurance benefits and increase Medicare payments to doctors. But a vote on a stand-alone tax bill would have forced Democrats into a position against a tax break supported by President Obama.
— This story was updated at 3:26 p.m.