Despite Republican calls for another round of negotiations on a payroll tax cut extension, Senate Majority Leader Harry Reid reiterated his position Monday—a deal was struck, take it or leave it. The tough stances from both sides gives the 2 percentage-point payroll tax cut, and extended unemployment benefits, a very uncertain future as Congress wraps up a chaotic final session.
"If Republicans vote down the bipartisan compromise negotiated by Republican and Democratic leaders, and passed by 89 senators including 39 Republicans, their intransigence will mean that in ten days, 160 million middle class Americans will see a tax increase," Reid said in a statement issued from his office. Reid said he had negotiated the deal with Senate Minority Leader Mitch McConnell at the request of House Speaker John Boehner. Reid's statement leaves only one possible avenue for moving forward. He says that he would be willing to negotiate a full-year deal after the House passes the temporary extension. The tax cut is set to expire at the end of the year.
Reid said he wouldn't call back the Senate, or reopen negotiations, until the House passes the two-month tax cut extension, a compromise Democratic and Republican Senate leaders announced Friday night, and passed overwhelmingly Saturday morning. Just hours earlier, Boehner denied that he had ever signed off on the deal, and urged the two chambers to convene a conference committee, the formal process for reconciling differences between Senate and House legislation. "The idea that tax policy can be done two months at a time is the kind of activity we see here in Washington that's really put our economy off the tracks," Boehner said.
Starting on Sunday and into the weekend, both parties have stepped up the rhetoric as they try to untie a knot that is unusually tangled—even for Congress. On Friday night, the sides seemed to be in agreement on a deal to extend the payroll tax cut for two months, using a fee for new home mortgages backed by Fannie Mae and Freddie Mac to pay for it. The sweetener for the deal was language forcing the Obama administration to make a decision about the controversial Keystone Pipeline. Senate Republicans thought they had forced another victory over Democrats and the White House. "For two months, we got Keystone," said one GOP aide, grinning, after the deal was announced. The Senate quickly passed that bill, a spending bill for 2012, and went into its winter recess.
But during a Saturday conference call with House Republicans, there was widespread dissatisfaction with the deal—including from members of the House Republican leadership, according to a Republican aide. By Sunday morning, Boehner said on Meet the Press that he and the rest of the GOP conference were opposed to the legislation, even though most Senate Republicans had approved it. With Reid refusing to call senators back to amend or change the legislation passed on Saturday, Republicans are hoping to "shame" the Senate into returning, as one GOP aide put it. The House Republican communications team blasted E-mails to reporters claiming that Democrats are prizing their vacations over the economic welfare of America. "Senate Democrat Leaders are demanding to stay on vacation rather than work the last two weeks of the year to ensure passage a yearlong extension of the payroll tax cut for 160 million Americans," said Brian Patrick, spokesman for House Majority Leader Eric Cantor.