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A Familiar, Sinking Feeling Develops on Payroll Tax Cut

Tom Williams/CQ Roll Call
Senate Finance Chairman Max Baucus (left) and House Ways and Means Chairman Dave Camp are among the members of the payroll tax cut conference committee, which has so far failed to reach a deal.

But, as has been the case all along, the two sides are far apart on how to pay for the policies. Tuesday’s meeting was the first to even broach the topic, but three proposals floated by the House GOP to offset $70 billion were unceremoniously shot down by Democrats in an often testy meeting.

Republicans broached a pay freeze for federal workers and a reduction to Medicare subsidies for seniors with a retirement income of $80,000 or more. They also proposed an increase to the maximum amount of money that must be paid back if someone receives a greater subsidy than he or she is entitled to under health exchanges created by President Barack Obama’s health care law.

Democrats accused Republicans of cherry-picking policies from Obama’s deficit reduction proposals instead of taking into consideration the full proposal, which also included their favored surtax on millionaires.

“If we’re serious, we’re going to have to compromise,” Sen. Benjamin Cardin (D-Md.) told Camp in one of the more-heated exchanges of the meeting. “But to go through this list that you are isolating, I’m not so sure is helpful to reaching an agreement on a set of offsets that I think we should get to.”

Republicans, on the other hand, hold that Democrats are harping on the millionaire tax when the proposal has already been shot down several times in the Senate.

Further complicating things is the fact that Senate Democrats have their annual retreat today, disrupting the workweek, and both chambers are scheduled to recess the week of Feb. 20.

There have been discussions about another short-term extension, and though both parties have expressed an outward reluctance to make such a move, the difference between Republicans and Democrats might yet again be too great to resolve.

“I guess the time-honored response in Washington is to split the difference, and the other one is, ‘Didn’t we just do this on a short-term basis?’ So I would just say that I hope it doesn’t get to that,” Senate Majority Whip Dick Durbin (Ill.) said.

Earlier Tuesday, in a demonstration of the stickiness of the situation, Sen. Dean Heller (R-Nev.) sent a letter to Camp asking him to consider keeping current levels of jobless benefits in states such as Nevada, where unemployment has run rampant. Heller is up for re-election this November.

“As the Conference Committee sets priorities, I urge you to preserve unemployment benefits at their current levels in states like Nevada that continue experiencing high unemployment,” Heller wrote.

Senate Republicans have not formally put forth a position on the change to the unemployment system, but sources close to the committee suggest their general position aligns with their House counterparts.

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