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House GOP Rejects 2-Month Payroll Tax Cut

Brendan Hoffman/Getty Images

WASHINGTON (AP) — The House Tuesday rejected a plan backed by President Barack Obama to extend a 2 percentage point payroll tax cut for two months to buy time for talks on a full-year renewal.

Republicans controlling the chamber are instead demanding immediate talks with the Senate on a year-long plan.

If Congress doesn’t pass a bill by the end of the year, payroll taxes will go up for 160 million workers on Jan. 1. Almost 2 million people could lose unemployment benefits in January as well.

The House vote, 229-193, kicks the measure back to the Senate, where the bipartisan two-month measure passed on Saturday by a sweeping 89-10 vote. The Senate then promptly left Washington for the holidays. Senate Majority Leader Harry Reid, D-Nev., says he won’t allow bargaining until the House approves the Senate’s short-term measure.

The vote caps a partisan debate on Obama’s jobs agenda, which has featured numerous campaign-style appearances but little real bipartisan negotiation, other than Senate talks last week that produced the two-month extension.

The Senate’s short-term, lowest-common-denominator approach would renew a 2 percentage point cut in the Social Security payroll tax, plus jobless benefits averaging about $300 a week for the long-term unemployed, and would prevent a 27 percent cut in Medicare payments to doctors.

The House passed a full-year extension last week, containing many spending cuts opposed by Democrats.

House Republicans, however, have erupted in frustration at the Senate measure, which drops changes to the unemployment insurance system pressed by conservatives, along with cuts to President Barack Obama’s health care law.

Also driving their frustration was that the Senate, as it so often does, appeared intent on leaving the House holding the bag — pressuring House lawmakers to go along with its plan.

Both sides were eager to position themselves as the strongest advocates of the payroll tax cut, with House Republicans accusing the Senate of lollygagging on vacation and Senate Democrats countering that the House was seeking a partisan battle rather than taking the obvious route of approving the stopgap bill to buy more time for negotiations.

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