US President Barack Obama faced a new political battle on Monday after the top Republican in the House of Representatives rejected a two-month payroll tax cut extension already approved by the Senate.
The US Senate passed a two-month payroll tax holiday extension on Saturday, guaranteeing fresh partisan bickering in the 2012 election year after denying Obama the one-year extension for the tax cut and unemployment benefits he had initially sought.
The House was expected to vote on it on Monday. But on Sunday, House Speaker John Boehner said that Republicans, who control the House, would oppose the Bill.
He pressed for Congress to pursue talks over the payroll tax holiday to extend the measure for a full year, rather than pass a short-term extension.
“It’s pretty clear that I, and our members, oppose the Senate Bill,” Boehner told NBC’s “Meet the Press”.
He said extending the tax cuts for just two months would mean lawmakers were “just kicking the can down the road”.
“It’s time to just stop, do our work, resolve the differences and extend this for one year,” Boehner added.
‘Good deal’
The statement appeared to be an about-face for Boehner, who on Saturday called the Bill a “good deal” and a “victory,” according to White House spokesperson Dan Pfeiffer said in a statement.
“If House Republicans refuse to pass this bipartisan Bill to extend the payroll tax cut, there will be a significant tax increase on 160-million hardworking Americans in 13 days that would damage the economy and job growth,” he said.
Boehner’s reversal came after a number of rank-and-file Republicans objected to the measure in a Saturday conference call with him, indicating that it would face a difficult battle.
“I would say it has a very steep uphill fight in our conference. Its a joke,” representative Tom Graves of Georgia said about the legislation.
Obama has urged the full Congress to pass the two-month extension now in order to avoid a tax hike on January 1, and then work on a one-year deal.
“It’s time House Republicans stop playing politics and get the job done for the American people,” Pfeiffer said.
Senate Democratic Majority Leader Harry Reid emphasised that he had hammered out the two-month extension in talks with his Republican counterpart Mitch McConnell. The measure was approved “with an overwhelming majority of Democratic and Republican votes,” he said.
Bipartisan compromise
“I would hate to think that Speaker Boehner is refusing to act on this bipartisan compromise because he is afraid it will actually pass, but I cannot imagine any other reason why he would not bring it up for a vote,” Reid said.
In the negotiations, “neither side got everything they wanted, but we forged a middle ground that passed the Senate by an overwhelming bipartisan majority”.
The compromise tax measure passed by the Senate has further dented Obama’s authority by forcing him to revisit a contentious pipeline plan he had already put on hold.
Obama had put off a decision on the Keystone XL pipeline, which will carry oil from Canada’s tar sands to the US Gulf Coast, until after the November 2012 elections, in which he is hoping to secure a second term.
The project pitted environmentalists against labour unions and business interests in his political base.
The Senate Bill gives the president just 60 days to review the deal.
Obama’s Democratic allies had initially hoped to fund the middle-class tax holiday by imposing a tax on the country’s wealthiest Americans who earn more than $1-million a year.
But they met stiff opposition from Republicans and had to abandon the plan. — AFP