Republicans under pressure on payroll tax

Republicans under pressure on payroll tax

House Republican Speaker John BoehnerUS House Republicans are coming under pressure to pass a bipartisan deal on extending a payroll tax cut, in a wrangle that has split the party.The editorial page of the conservative Wall Street Journal has labelled the episode a “fiasco” that could end up re-electing President Barack Obama.

Senate Republicans have criticised their House colleagues and demanded they pass the package.Without a deal, payroll taxes will rise for 160 million workers next month.Economists have said the US economic recovery would suffer if wage-earners were hit with an effective $1,000-a-year (£638) tax hike.The Republican-led House of Representatives on Tuesday rejected a two-month extension of the tax break that had been passed overwhelmingly by most members of their own party in the Senate, along with Democrats.

House Republicans, who propose extending the payroll tax holiday for a full year, are now urging the Senate to return from its holiday for formal negotiations.Republicans initially showed little enthusiasm for the $120bn plan, until their political opponents began to accuse the party of being interested in tax cuts only when they applied to the wealthiest Americans.

Correspondents say the Republican party leadership feared the issue could prompt a voter backlash ahead of next November’s presidential elections.On Wednesday, Republican House Speaker John Boehner called the media to a Capitol Hill conference room where he was joined by his deputy, Eric Cantor, and eight other Republican lawmakers.

Mr Boehner said eight empty chairs across the table were reserved for Democratic lawmakers to join them for negotiations.”All we’re asking for is to get the Senate members over here to work with us to resolve our differences so we can do what everybody wants to do: extend the payroll tax credit for the next year,” Mr Boehner said.But Senate Democrats, who are said to be relishing their opponents’ political divisions, have refused to reopen negotiations.”I urge you to reconvene the House to act on the Senate’s bipartisan compromise as soon as possible,” Democratic Senate Majority Leader Harry Reid said in a letter on Wednesday to Mr Boehner.

That message was echoed by Democratic President Barack Obama – who has delayed a family holiday to Hawaii until the deadlock is resolved – in a phone call to Mr Boehner on Wednesday.But a Boehner aide said afterwards that the House Speaker did not budge.Later, the president went on a shopping trip to Virginia, stopping in a pet shop to buy a bone for his dog Bo and in an electronics store for some Nintendo Wii video games.The excursion came as a reminder that Mr Obama is “home alone”, having said he will stay in Washington until Congress passes an extension of the payroll tax holiday.

The White House said Mr Obama would work with Republicans to pass a one-year extension of the payroll tax cut, if the House approved the interim deal as a first step. The Wall Street Journal, meanwhile, not usually a critic of congressional Republicans, lambasted the party’s handling of the payroll tax dispute.Its editorial on Wednesday said the caucus had “achieved the small miracle of letting Mr Obama position himself as an election-year tax cutter”.Republicans should “cut their losses and find a way to extend the payroll holiday quickly”, it added.

Several Republican senators have also criticised their colleagues over the dispute.Massachusetts Sen Scott Brown, who faces a tough re-election battle next year, said: “House Republicans would rather continue playing politics than find solutions.”The White House has taken its battle to Twitter, asking voters what the extra money in their pay would mean to them. It said it had received 18,000 responses since Tuesday.

A Washington Post-ABC News poll this week found President Obama’s approval ratings at 49%, their highest level since March, while public opinion of Republicans had continued to deteriorate.The dispute caps a year of partisan confrontations that sent the US to the brink of a first-ever default, prompted a historic credit-rating downgrade, and risked partial shutdowns of the federal government. – BBC