US President Barack Obama smiles as he signs the Temporary Payroll Tax Cut Continuation …
President Barack Obama signed into law a two-month payroll tax cut extension on Friday, capping a year of fierce partisan combat over taxes and spending that will resume in January and play heavily in the 2012 elections. The Senate and the House of Representatives, by voice votes in chambers nearly emptied for the holidays, passed a $33 billion (21 billion pounds) bill to keep the payroll tax rate at 4.2 percent through February. It had been scheduled to increase on January 1 to 6.2 percent. Obama swiftly signed the bill.
Obama Assails 'Ridiculous Washington Standoff': 'Enough is Enough'
With just nine days before a payroll tax break for 160 million Americans expires, President Obama assailed House Republicans for a "ridiculous Washington standoff" and stepped up pressure on them to pass a two-month extension bill that sailed through the Senate by a bipartisan vote.
"This isn't a typical Democrat versus Republican issue. This is an issue where an overwhelming number of people in both parties agree," the president said today. "How can we not get that done? Has this place become so dysfunctional that even when people agree to things we can't do it? It doesn't make any sense."
The president, who delayed his vacation to Hawaii with his family because of the stalemate, was surrounded by individuals who wrote to the White House detailing how the end of the payroll tax break would affect their lives.
The White House is pursuing an aggressive campaign on social media to highlight the loss in benefits that millions of Americans will incur on Jan. 1 if Congress doesn't act. Americans, on average, would lose about $40 per paycheck if the tax cuts expire. On Wednesday, Obama himself personally took to Twitter asking Americans to share what that loss would mean to them.
"Forty dollars can make all the difference in the world," Obama said today, as he read out stories from Americans who had responded to his request. "Enough is enough. People standing with me cannot afford any more games."
Obama said more than 30,000 people have responded to the White House's "What 40 Dollars a Paycheck Means to American Families" campaign on Twitter, Facebook and whitehouse.gov.
House Republicans are facing increasing pressure, even from their Senate counterparts, to find a compromise quickly. Republican aides say GOP leaders may come to an agreement soon, but today, the House GOP leadership showed no outward sign of caving in, reiterating defiantly that they would not support the Senate bill.
"The fact is, we can do better," Speaker John Boehner, R-Ohio, said in a news conference. "It's time for us to sit down and have a serious negotiation and solve this problem."
Boehner's office said he called Obama this morning and asked him to send members of his economic team to find a way to agree on a one-year deal, but the president declined. According to the White House, the president told Boehner "the only viable option" is the two-month extension, and that Obama "is committed to begin working immediately on a full-year agreement once the House passes the bipartisan Senate compromise."
Democratic leaders are calling on House Republicans to pass the two-month extension that the Senate approved on Saturday, and then continue negotiations on a long-term fix when members return from recess in January.
In a bid to break the impasse, Senate Minority Leader Mitch McConnell proposed a compromise, asking the House to pass the short-term extension in exchange for the Senate appointing members to a conference committee which will negotiate a longer-term extension. The proposal won a nod of approval from Obama and Senate Majority Leader Harry Reid.
"House Republicans sensibly want greater certainty about the duration of these provisions, while Senate Democrats want more time to negotiate the terms," McConnell said in a statement. "These goals are not mutually exclusive. We can and should do both."
Another Republican, Rep. Dave Camp of Michigan, suggested on CNBC today that Congress extend the payroll tax cuts for three months so it at least covers the first quarter. It was the first sign that House Republicans are willing to budge from their position of passing a one-year extension only.
House GOP leaders are facing pressure from many Tea Party-backed members who are refusing to support a short-term extension. Aides say the two sides will likely reach a deal next week and the tax cuts will be extended, but that remains to be seen.
Even Senate Republicans have joined the chorus of people calling on Boehner and the House GOP leadership to agree to the temporary extension.
"There's no doubt this hurts the Republican Party, and that bothers me a great deal, as a Republican," Sen. John McCain, R-Ariz., said on CBS News this morning, adding that he feels bad for American taxpayers who are "innocent bystanders caught in the crossfire."
"This is really tragic for the American people. And I would say that next November, no incumbent is safe, nor should they be," McCain said.
Senior Democrats today pounced on Republicans for not agreeing to the two-month extension.
"Republicans have been arguing about process and politics," House Minority Whip Steny Hoyer said today. "The stakes are too high to be arguing about politics and process. The Republican contention that the two-month compromise somehow is unworkable is simply untrue."
If members of Congress cannot come together on a deal by the end of next week, 160 million American workers will see a 2 percentage point raise in their taxes, starting Jan. 1, raising the overall tax burden to 6.2 percent. Three million people who are receiving long-term unemployment benefits will also see their benefits drop. The gridlock also impacts Medicare, which will likely lower its reimbursements to doctors.
The payroll tax cuts, passed by George W. Bush's administrations are popular on both sides of the political aisle. Washington experienced a similar gridlock in 2010 when the time came to renew the cuts.
Meanwhile, 2012 Republican presidential contenders have expressed mixed views on the payroll tax extension debate.
Former Massachusetts Gov. Mitt Romney on Wednesday skirted the question of whether he supports Boehner's decision to reject the Senate bill, only saying, "My own view is had I been president, I would have been working with the leaders in both parties to see if there's not a way to reach common ground. My assessment of the circumstances is that there is common ground to reach in this matter. This should have been dealt with some time ago."
Newt Gingrich, however, took a widely different approach. Going into what appeared to be Speaker mode, the former Speaker jumped to give his Republican counterparts in the House some advice.
"Incumbent presidents have enormous advantages. And I think what Republicans ought to do is what's right for America," Gingrich said. "They ought to do it calmly and pleasantly and happily."
Conservatives have lashed out at House Republicans for creating a "fiasco" that puts the party in a negative light and virtually hands over the win to Obama and Democrats.
"The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play," the Wall Street Journal stated in an editorial Wednesday. "Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he's spent most of his presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible."
In an election year, a deadlock such as this could have significant negative consequences.
"Through all this analysis of the fiasco, there is a sense of doom for the Republican House. They have gone out on an ice floe with no obvious way back to shore," wrote conservative radio talk show host John Batchelor. "There is a strong possibility that President Obama will nurse the grievance against the Republican Party, and the Tea Party particularly, until the State of the Union."
ABC News' Jonathan Karl, Ann Compton and Amy Walter contributed to this report.
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