"Bah! Humbug!" might as well have been the words of House Speaker John Boehner, who may seem like Ebenezer Scrooge to millions of Americans now facing a year-end payroll tax increase.
On Tuesday the Republican controlled House of Representatives rejected a Senate approved bill that would have extended payroll tax cuts for two months and allowed the unemployed to continue receiving jobless benefits. The House instead voted 229 to 193 to establish a negotiating committee so the two chambers can resolve their differences. But the Senate, having Saturday passed the payroll tax extension measure 89-to-10, is in recess until after the holidays and Senate Majority Leader Harry Reid has said he would not call them back.
If the payroll tax cuts are not extended salaries will be taxed an additional 2%, or about $1,000 per year for the average American. The Senate bill would extend the payroll tax cuts for two months and it would also prevent a large drop in fees paid to doctors who accept Medicare. It appears that House Speaker Boehner refused to bring the Senate bill directly to the floor for an up or down vote because it would have passed with the necessary Republican support.
Many Republicans who face difficult reelection campaigns were critical of their own leadership. Among them Massachusetts Senator Scott Brown, who issued a statement after the vote that House Republicans, "would rather continue playing politics than find solutions." He added, "Their actions will hurt American families and be detrimental to our fragile economy."
The devil is in the details of the debate. Most members of Congress agree that the payroll tax cut should be extended for another year. But Republicans and Democrats, including the president, disagree on how to make up for the $150 billion shortfall to Social Security. The president proposed raising the taxes of the wealthiest Americans by about 3%. Republicans objected to any tax increase instead offering cuts in social programs. The president agreed to drop his tax proposal.
Meanwhile the Senate went ahead and passed a two-month extension to buy time for further negotiations over funding. It passed the Senate by a 9 to 1 margin, including a majority of its Republican members. The two-month extension would cost about $33 billion which would be funded by an increase in the fees that new homeowners with federally backed mortgages would pay to Fannie Mae, Freddie Mac and the Federal Housing Administration. The Congressional Budget Office reports the bill would reduce the deficit by $3 billion.
But House Republicans, primarily Tea-Partiers, oppose the Senate bill because they are said to be concerned with the uncertainty caused by just a two-month extension, as well as the political benefit the White House could gain in the national dialogue over taxes. It appears that they forced Speaker Boehner to take a hard line on the measure. The Speaker sent a letter to President Obama, which said, "I ask you to call on the Senate to return to appoint negotiators so that we can provide the American people the economic certainty they need."
Speaker Boehner changed positions on the Senate bill, after earlier indicating in a party conference call he would support the Senate compromise. To many it appeared that Majority Leader and aspiring Speaker Eric Cantor pressured Boehner to change his position. However, Boehner said he only praised a provision in the Senate bill requiring presidential action on the Keystone pipeline.
So as Christmas approaches, millions of Americans face a tax increase because Republicans want to defeat President Obama more than they want to help the middle class. And when they want to know how the Grinch stole Christmas, they can ask Ebenezer Boehner. Bah Humbug!