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House Republicans, Senate Locked In Stalemate Over Payroll Tax Extension

Obama: If They Don't Come To An Agreement, Your Taxes Will Go Up Come Jan. 1
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President Barack Obama

President Barack Obama (credit: Getty Images)

NEW YORK (CBSNewYork) — House Republicans have refused to approve extensions to payroll tax cut and unemployment benefits. The action leaves millions of Americans in the lurch.

“The clock is ticking, and time is running out. If House Republicans refuse to vote for the Senate bill, or even allow it to come up for a vote, taxes will go up in 11 days,” President Barack Obama said Tuesday.

Obama warned on Tuesday that without a compromise most of us will have lighter wallets come January, reports CBS 2’s Marcia Kramer.

“We have people that are counting on us to make their lives just a little bit easier,” the president said.

There was an attack Tuesday by a group of Staten Island Democrats on Republican Congressman Michael Grimm for refusing to support an extension of the payroll tax cut, which amounts to about $1,000 for the average tax payer.

It is a foreshadowing of what House Republicans will face if their inability to agree with the Senate continues and results in a tax hike on Jan. 1.

“That is such a fearful … such a cruel thing to gamble with other people’s ability to be able to enjoy this holiday season,” said Rep. Charles Rangel, D-Harlem.

“Is this the Christmas present? Is this the New Year’s gift that were going to give the American people?” asked Rep. Frank Pallone, D-N.J.

“What is happening here today is shameful, it is a disgrace,” added Rep. John Lewis, D-Ga.

But Rep. Grimm defended his vote.

“Everyone knows that a two-month Band-Aid is not the right approach. Even the president said it would be inexcusable not to pass this for a year,” Grimm said.

At issue is the House’s refusal to agree with a Senate bill that extends the payroll tax for 160 million Americans and unemployment benefits for up to 2 million Americans for two months. The House wants a one-year extension.

“As I see the debate today you’re arguing for a $166 tax cut because it’s only for two months. I want to give the average American family a $1,000 tax cut. That means doing it for 12 months,” House Speaker John Boehner said. “A two months extension is nothing more than kicking the can down the road.”

What the House did do Tuesday was what some said is politically sneaky. It didn’t want to outright vote against the payroll tax cut, with this being an election year and all, so instead it voted to “disagree” and seek a Senate conference to come up with a compromise. The problem is the Senate is in holiday recess and Senate Majority Leader Harry Reid said he won’t come back.

“Put the bill on floor. Don’t twist arms. Let people vote as they wish to vote. The large majority would vote for it,” New York Sen. Charles Schumer said. “To just simply pull the rug out from under [taxpayers] would be bad for the economy, bad for them.”

As of late Tuesday it was a stalemate. The Senate won’t agree to any House compromise until that body passes the original two-month extension, and highly placed House sources told Kramer that Tea Party activists won’t do that.

One congressman said “It’s so crazy … Right now nobody knows how we’re going to save the tax cut, or if we will.”

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