Dec 20, 2011

WASHINGTON — House Republicans on Tuesday soundly rejected a bill approved by the Senate that would have extended the payroll tax cut for most Americans beyond the end of the year and allowed millions of unemployed people to continue receiving jobless benefits.

The House vote, which passed 229 to 193, also calls for establishing a negotiating committee so the two chambers can resolve their differences. Seven Republicans joined Democrats in opposition.

But the Senate has left town for the year, and Democrats say they do not intend to call it back, putting continuation of the tax cut in jeopardy and leaving a shadow over many unemployed Americans as the holidays near.

It was far from clear whether the two sides would be able to bridge the gap by year’s end. If they fail to do so, payroll taxes for 160 million Americans will rise to 6.2 percent, from 4.2 percent, in January, for an average annual increase of roughly $1,000.

Republicans said the two-month extensions provided by the Senate bill left too much uncertainty at a time of deep economic vulnerability and would leave Congress facing the same thorny issues early in the new year. They said it was a deeply inadequate half-measure that represented the old ways of Congress.

House Republicans structured the vote Tuesday to avoid being seen as voting directly against a tax cut.

“We have to help struggling American families,” Representative Jeb Hensarling of Texas, a member of the House Republican leadership, said earlier on CNN. Mr. Hensarling added that “House Republicans stand ready to work over the holidays, like many other Americans have to do, to get this done.”

But Democrats, seeming to feel the political wind at their back, said that the other party had missed its best chance to protect the economic interests of the middle class.

Representative Nancy Pelosi of California, the House Democratic leader, said during floor debate that Republicans across the country supported the payroll tax cut extension, as most Republicans in the Senate had done in a vote Saturday.

“It is just the extreme Tea Party element of the Republicans in the House of Representatives who are standing in the way of a tax cut for 160 million Americans, unemployment benefits for millions of Americans, and Medicare opportunities for 48 million seniors,” Ms. Pelosi said.

The bill that the Senate passed on Saturday, in an 89-to-10 vote, would also prevent a sharp cut in the fees paid to doctors who accept Medicare. Some leading Republican senators, including Senator Scott P. Brown of Massachusetts and Senator Richard G. Lugar of Indiana, have called on their counterparts in the House to support that vote.

Ms. Pelosi, noting that Republicans had said a two-month extension was too short, continued: “They’ve never wanted a tax cut, and now they’re saying the tax cut for middle-income people is too small. So what is it?”

House Republicans have demanded that the Senate reopen negotiations over the benefits, cutting into the holiday recess.

With tempers growing short and pressure rising for a deal, Representative Eric Cantor of Virginia, the House Republican leader, seemed to strike a particularly conciliatory tone.

“We need to come together in a responsible manner to find common ground where we can accomplish everyone’s goal of a year-long payroll tax extension,” Mr. Cantor said during the floor debate. “Mr. Speaker, there is no reason why the House, the Senate and the president cannot spend next two weeks working to get that done. America will be waiting.”

Senate Democrats, however, have said they would not return to the Capitol to negotiate further until the House passed the short-term bill, one that Senator Mitch McConnell of Kentucky, the Republican leader, negotiated and voted for, along with 38 other Republican senators on Saturday.

The House had been planning to vote on the two-month payroll tax bill on Monday night. But after a two-hour meeting of their caucus, House Republican leaders postponed the floor debate and the vote to Tuesday.

Rather than have a straight up-or-down vote, the House implemented a procedural maneuver in which it “rejected” the Senate bill while requesting to go to conference with members of that chamber in a single measure, protecting House members from having to actually cast a politically unpopular vote against extending a payroll tax cut.

During the conference meeting among Republican members, some members expressed concern about effectively voting for a tax increase on the eve of an election year, said some who attended.

Before the vote Tuesday, Speaker John A. Boehner, Republican of Ohio, said he was confident that he had the votes to reject the Senate version of the bill.

The standoff leaves Mr. Boehner ending the year exactly where he began, in the middle of a nasty fiscal fight with Senate Democrats and his conservative freshmen in revolt, making it difficult to find a middle ground between mollifying his conference and coming up with legislation to avert disaster. But Mr. Boehner said repeatedly on Monday that he believed a deal for a one-year extension could still be struck, even with the Senate essentially adjourned for the year and the tax break set to expire on Jan. 1.

“I don’t believe the differences are that significant that we can’t do this for a whole year,” Mr. Boehner said. “Why punt this until the end of February when we can just do this now and get it over with?”

Senator Harry Reid, the Nevada Democrat and majority leader, urged Mr. Boehner to allow an up-or-down vote. ”With millions of Americans struggling to make ends meet, it would be unconscionable for Speaker Boehner to block a bipartisan agreement that would protect middle-class families from the thousand-dollar tax increase looming on January first,” Mr. Reid said in a statement.

Jennifer Steinhauer and Robert Pear contributed reporting.
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