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Obama: Impasse means tax hike

Dec. 20, 2011 at 3:55 PM   |   Comments

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WASHINGTON, Dec. 20 (UPI) -- U.S. President Barack Obama said Tuesday "taxes will go up Jan. 1" because House Republicans refuse to compromise on extending a tax cut.

The Republican-controlled House Tuesday voted to reject a Senate compromise over a tax cut extension and to send it to committee.

The Senate legislation would extend the payroll tax cut for two months, followed by negotiations. House Republicans have approved legislation calling for a one-year extension, but Democrats say it contains elements that would hurt senior citizens and the unemployed.

Tuesday's 229-193 vote to reject the Senate compromise was largely along party lines. The Senate and House now should choose representatives to the committee, which would attempt to resolve the differences in the legislation. Then each chamber of Congress would vote on the bill out of committee.

The Senate compromise "is the only viable way to achieve a tax cut on Jan. 1, the only way," Obama said, adding that he had called for the extension "months ago."

"What Republicans are holding out for is to wring concessions from Democrats," Obama said, "so the one-year deal is not an issue. The clock is ticking. Time is running out. And if the House Republicans refuse to allow [the Senate compromise] to come up for a vote, taxes will go up Jan. 1."

Asked whether Obama would delay his vacation until an extension is enacted, spokesman Jay Carney said: "The president intends to stay and work with Congress to ensure that Americans don't have their taxes go up. But let's be clear about where the power to make that happen resides.

"The president supports this bipartisan compromise," he said. "Senate Democrats support this bipartisan compromise. Senate Republicans overwhelmingly support this bipartisan compromise. At least a handful, if not more already on the record, House Republicans support this bipartisan compromise. I suspect that many, many more do. The holdout here -- the holdouts are very much in the minority. The House ought to vote to make sure Americans don't have their taxes go up."

Speaker John Boehner told the House Republicans had done what Obama had asked, including the one-year extension. Since both sides want a one-year extension, Boehner said, "the only question is when we want to do it. Why don't we do it now and give the American people a real Christmas present?"

GOP leaders had promised an up or down vote on the Senate legislation, but changed their minds Tuesday. The payroll tax cut extension, about $1,000 per family, expires Dec. 31 for about 160 million Americans if no action is taken soon.

The Senate version of the tax cut extension would last for only two months while leaders of both parties tried to work out a compromise. The Senate version was approved by 50 Democrats and 39 Republicans.

At least four GOP senators, Scott Brown of Massachusetts, Dean Heller of Nevada, Richard Lugar of Indiana and Olympia Snowe of Maine, had urged House Republicans to support the bipartisan compromise.

House leaders insisted the tax cut extension must be set for one year from the outset -- a goal Democrats claim as well, but insisted the one-year extension had to follow more negotiations after a two-month pause.

House Majority Leader Eric Cantor, R-Va., said in debate, "In this tough economy middle class Americans and families need to know that their taxes won't go up at any point next year. ... According to experts, the two-month plan is simply unworkable. ... We believe all Americans deserve certainty."

Rep. Dave Camp, chairman of the House Ways and Means Committee, said, "Two months isn't long enough. .. It's embarrassing that we're doing tax policy for two months."

Republican after Republican argued that the Democratic approach did not give the public "certainty."

But Democrats say Republicans have poisoned their legislation by slashing unemployment benefit extensions, cutting Medicare payments and including a controversial oil pipeline from Canada to Texas over sensitive U.S. aquifers.

House Minority Leader Nancy Pelosi, D-Calif., said, "This is a pretty simple matter. ... Last night the leadership of the Republican Party announced that we would be able to vote up or down on the Senate bill," but changed their minds.

Pelosi contended an up or down vote "would probably attract some Republican support [for the Senate bill]. It could go to the president today."

She insisted, "It's just the extreme Tea Party elements in the House that are standing in the way of a tax cut," adding Republicans "never wanted a [middle class] tax cut to begin with."

Rep. Sander Levin, D-Mich., ranking member on the House Ways and Means Committee, said, "If you're so sure of your arguments, why not allow a vote on the Senate bill? ... It's because you're afraid you will lose it, or you don't want some people voting 'No' on the record."

© 2011 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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