Payroll Tax Cut May Not Come Until January

With Congress in a standoff, some predict issues won't get resolved until January.

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After the House voted 229-193 to reject a Senate-passed two-month extension of the payroll tax cut, Congress backed itself into a default position—gridlock.

With what critics call a "Kim Jong-Il" House calling for a negotiated settlement, staffers are predicting that the delay will force lawmakers to retroactively extend the payroll tax cut, and extended unemployment insurance after they have expired.

"You can make all these things retroactive if you need to. It's not easy to do," a Senate Democratic aide says. "That's sort of how I imagine it playing out."

Today's House vote effectively kills a Senate bill to extend unemployment benefits for the long-term jobless and continue a 2 percent payroll tax cut for two months. Even though the Senate overwhelmingly passed their version on Saturday—with the tacit agreement of House Speaker John Boehner, according to Democrats—rank-and-file House Republicans balked at the Senate version during a conference call the next day. They're calling for a full year of payroll tax cuts.

While the House voted to go into a conference committee, the formal procedure for reconciling differences between House and Senate-passed bill, Senate Majority Leader Harry Reid has struck a hard line, claiming that he won't re-enter negotiations until the House passes the Senate-passed bill.

[GOP leaders frustrated with Senate approach.]

While Republicans have praised a return to regular order, Democrats have been noting that it takes time to jump through all the hurdles. House Minority Whip Steny Hoyer said on Monday that it takes three cloture votes to approve a conference report, with 30 hours of debate each.

"That's 90 hours of debate. Ho, ho, ho," he said. Multiple aides predicted that Congress might not be able to resolve the issue until January, when the tax rates will have already gone up and unemployment insurance will be set to expire for millions of Americans who've been without work for longer than six months.

"It's a tough pill to swallow," a House Democratic aide says.

Republicans aides have said they hope that by calling for a conference report—essentially, asking the Senate to come back to the bargaining table—they will win the message war and force Reid to soften his stance.

But Democrats are convinced that they're winning the message war.

The House didn't technically vote down the Senate bill, but rather approved a resolution expressing disapproval of it. While Republicans claim they're near-unanimous in their rejection of the Senate plan, Democrats pointed to the parliamentary tactics as proof that Boehner has lost control of his party, and was afraid to bring the measure up for a vote.

"Kim Jong-il has more control of North Korea right now than Boehner has over his conference," one Democratic aide said.

Twitter: @AlexParkerDC