Senators were warned yesterday that if they let the payroll tax break expire at the end of the month, the burgeoning economic recovery will take a “very sharp” hit.
Congressional Republicans may very well let it happen anyway.
After a bitter fight in December, GOP leaders accepted a two-month extension of the payroll cut, giving policymakers a new deadline — Feb. 29, three weeks from today — to agree to a year-long deal. As of mid-January, the prospects for an agreement looked pretty good, in large part because Republicans didn’t want to be on the hook for a middle-class tax increase in an election year.
Striking an acceptable deal, however, is proving to be far more difficult than even some of the key officials expected.
Members of the payroll conference committee fought to a draw in their fourth public meeting Tuesday, making no progress toward finding a way to pay for a payroll tax holiday and dimming the prospects that a deal can be struck by the month’s end.
A Senate Democratic offer on unemployment insurance issues is in the works, and Members said they want to pick up the pace of the talks. But — barring a major breakthrough in the next few days, Members acknowledged — the latest high-stakes negotiation in a year of botched cross-party talks will go the way of the Joint Committee on Deficit Reduction: abject failure.
“I was very discouraged after today’s session,” conferee Rep. Henry Waxman (D-Calif.) said. “We may be facing what Congress has faced every step of the way — in the super committee, on the debt ceiling.”
In each of the previous fights, a bipartisan agreement proved to be impossible because Republican lawmakers were unwilling to make concessions as part of a larger compromise.
At issue is a package with a price tag of nearly $200 billion, which would include a payroll tax cut for the rest of the year, an extension of emergency unemployment benefits, and the Medicare “doc fix” on physician reimbursements. As is always the case, the fight between Democrats and Republicans is over how best to pay for the bill.









