House Republican leaders said Monday that they will ready legislation to extend the payroll tax cut without offsetting its cost through the end of 2012 as a backstop in case lawmakers' efforts to authorize a comprehensive extension of that and unemployment benefits fail.
House Speaker John Boehner (OH), Majority Leader Eric Cantor (VA) and Majority Whip Kevin McCarthy (CA) announced the alternative route amid signs that the formal conference committee in charge of crafting a compromise bill on the expiring unemployment insurance and tax cuts has stalled.
"Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue regarding offsets, unemployment insurance, and the ‘doc fix,'" the trio said in a statement. "If Democrats continue to refuse to negotiate in good faith, Republicans may schedule this measure for House consideration later this week pending a conversation with our members."
Congress extended the expiring benefits at the end of December, shortly before each had been scheduled to lapse after Dec. 31. That agreement wasn't reached, however, until House Republicans relented on their demand that the programs be extended for all of calendar year 2012, along with having their costs fully offset.
Republicans agreed to the short-term extension only in exchange for the formal "conference" process intended to resolve differences between House and Senate legislation. But that reversal only came after a number of Republicans accused their House colleagues of politically damaging intransigence.
But with just a few weeks left to go until the Feb. 28 deadline, the conference committee appears mired in stalemate, with disagreement falling along familiar fault lines. Democrats wish to impose new revenue-raising measures on the wealthiest Americans to finance the tax cuts and benefit extensions, while Republicans decry such efforts as tax hikes, and wish to find savings instead through budget cuts.
The GOP's maneuver on Monday is a bid to put Democrats on their heels, and push back against the narrative that President Obama has used to great effect, casting Republicans as having obstructed middle-class tax relief by playing politics. If Congress were to authorize the tax cut extension without offsets -- something for which Democrats have pushed -- Republicans would conceivably be able to deny responsibility for the failure of negotiations.
Pelosi herself has told reporters repeatedly that she does not believe the payroll tax cut should be paid for as it is an "emergency" program implemented during a down economy. Boehner admits in his statement that "this is not our first choice," which reflects the fact that many in the Republican conference, especially conservative members, believe that this tax cut, if it's done at all, should have its cost offset. The total cost of the 10-month extension is around $100 billion.
Because of that conservative opposition, the bill would likely need to rely on Democratic support to pass, putting Democrats in the tough position of being forced to vote for a tax cut they have been pushing Republicans to pass.