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Differences Remain on Paying for Payroll Tax Cut

Scott J. Ferrell/CQ Roll Call File Photo

The payroll tax cut conference committee is prepared this week to debate its most daunting difference: how to pay for the full-year bill.

According to aides staffing the panel and Democratic lawmakers emerging from a meeting this evening, the conference committee will debate Tuesday how to offset a full-year extension of the payroll tax holiday, unemployment benefits and lapsing Medicare doctor payments.

But with only three weeks left to bridge the gap between the parties and no clear path toward agreement, the arguing might be as political as it is constructive. Senate Democratic leaders have already announced they are working on a backup plan in case the bipartisan, bicameral committee fails to reach a deal.

And that seems just fine to Democratic conferees.

“I think the Majority Leader is doing exactly what he has to do,” said Sen. Benjamin Cardin, a conferee. “If we can’t get it done by the end of the month, we shouldn’t let these provisions expire.”

The Maryland Democrat added that he is “cautiously optimistic” the committee can reconcile the House and Senate positions, but both he and Sen. Bob Casey (D-Pa.) would not confirm indications from aides close to the committee that Democrats would make more formal offers to Republicans this week.

Time is running short, and leadership aides in both parties and chambers appear skeptical that the panel will reach a solution on its own, indicating that a deal among leaders — like so many other agreements this Congress — will be required.

At his daily briefing today, White House Press Secretary Jay Carney was asked about what the administration is doing to avoid an “eleventh-hour crisis or negotiation.” Carney said the White House is “in conversations with folks on the Hill” but that the process is “being led by the Hill.”

“It should be fairly simple. We’ll see if that is in fact the case,” Carney told reporters. “But we believe that everyone in Congress, Republicans and Democrats alike, should see it as the right thing to do to make sure that 160 million Americans don’t have their taxes go up on March 1.”

There is some political calculation on the White House’s part in deferring to the Hill on this process. President Barack Obama is gaining momentum on the campaign trail by running against Congress and made that a cornerstone of his State of the Union speech last month. If the conference committee deadlocks, like the Joint Committee on Deficit Reduction before it, Obama has another example in his dossier of failed Congressional initiatives.

It’s on this point that it appears Republican leaders are trying to turn the momentum in their favor and against Democrats.

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