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Lawmakers remain far apart on year-end tax and spending issues


Updated 8:00pm ET:  The holiday spirit seems nowhere near the Capitol Hill this Wednesday evening, with Democrats and Republicans far apart on a deal to fund the government, and extend an expiring payroll tax cut and lapsed unemployment benefits.

Lawmakers were no closer to a deal by the end of the day following a meeting between President Obama and Senate Democratic Leaders at the White House to discuss their strategy going forward. And there was no comment after an early evening meeting between House Speaker John Boehner, Majority Leader Harry Reid and Minority Leader Mitch McConnell in the Capitol.

Separately, Boehner huddled with his members for more than two hours to plot their options. House Republicans are awaiting action in the Senate on the payroll tax cut bill they passed last night. According to GOP aides, House Republicans weighed whether to move ahead without Democrats on their own, different bill to fund the government after it runs out of money on Friday.

Boehner asserted that the White House and Senate Democrats had made an agreement to fund the government until Democrats reneged.

The White House had decided to link the payroll tax cut to the extension of government funding so as to maintain leverage over Republicans, who could theoretically adjourn the House, and force the Senate, along with the Obama administration, to accept or reject the House-passed legislation.

"It's pretty clear to all of us that President Obama and Senator Reid want to threaten a government shutdown so that they can get leverage on a jobs bill," Boehner told reporters early this evening, accusing Democrats of playing politics on the issue.

In the Senate, Reid sought this morning to hold an immediate vote on the House bill. But after a testy back and forth on the Senate floor, McConnell blocked the vote.

"Let's vote on this now," Reid said. "We knew Monday that the bill wouldn't pass the Senate. We also knew yesterday that this bill wouldn't pass the Senate and we still know that. It won't pass the Senate."

But, McConnell fought back and said the more pressing issue was funding the government.

"A government shutdown is two days away," he said. "So first things first. Let's keep the government from shutting down. These other measures don't expire until the end of the month."

The game of chicken left members frustrated today.

Senator Claire McCaskill (D-MO) speaking outside the Senate chamber, "Let's quit behaving like this is a sporting event and try to get to the work... That is the kind of stuff that is driving the American people bat crazy right now, and we need to stop it."

And Sen. Jon Kyl (AZ), the number two Republican, said Boehner and Reid need to start negotiating.

"These continuing side by side votes on stuff that we know isn't going to pass doesn't do anything but waste time," he complained.

The battle will continue tomorrow. Senate Democrats said late tonight they are preparing to introduce their third bill in as many weeks to extend the payroll tax cut. That bill will drop their demand to impose a surtax on millionaires to pay for the tax cut, a minor concession to Republicans.

The congressional infighting has contributed to some of the worst approval ratings for lawmakers in recent memory; 42 percent of Americans called this Congress "one of the worst" in an NBC News/Wall Street Journal poll released this week. As for why they're most disappointed? A plurality of Americans cited partisan disagreement that's led to poor productivity on Capitol Hill.

That frustration has been fueled, in part, by a series of standoffs between Democratic and Republican lawmakers, which has led the country to the brink of a shutdown several times this year. A last-minute deal in April averted a shutdown and funded government through the end of September, and negotiations over whether to raise the nation's borrowing limit similarly went down to the wire in August, threatening default.

Their popularity tarnished by the debt talks, lawmakers wrangled over a series of shorter-term stopgap measures throughout the fall. An October continuing resolution hit a snag over how to fund increased disaster relief funds. When that spending ran out in mid-November, before lawmakers were set to recess for Thanksgiving, they extended funding through Dec. 16, this Friday.

The House has already extended its work to handle the unfinished items. The Obama administration and Democrats are looking to link a so-called "megabus," or compilation spending legislation that would extend spending through next September, to the payroll tax extension before Congress. If Congress were to successfully approve both, it would theoretically prevent a similar game of shutdown brinksmanship for most of the next calendar year.

NBC's Luke Russert and Frank Thorp contributed to this post.