Obama, GOP skirmish on payroll tax cut both favor

WASHINGTON (AP) — President Barack Obama vowed to delay Congress’ year-end vacation as well as his own Thursday for “as long as it takes” to extend Social Security payroll tax cuts and long-term jobless benefits, his second challenge in as many days to conservative Republicans.

Obama stated his position as the House GOP leadership put the finishing touches on legislation that meets White House specifications in important areas but also contains at least one provision the president has pledged to veto.

A vote in the House is likely early next week, and party officials said the president’s threatened veto, which relates to a proposed oil pipeline from Canada to Texas, had made it easier to round up support from conservatives eager to be seen defying Obama.

“Frankly, the fact that the president doesn’t like it makes me like it even more,” said Ohio Rep. Jim Jordan, a leader of House conservatives, who added he had supported an earlier version, as well.

Separately, the two parties skirmished inconclusively in the Senate — each side blocking action on the other’s payroll tax alternative — in a showdown that dramatized the partisan nature of the struggle nearly a full year in advance of the 2012 elections.

Given the slow economic recovery and the political appeal of renewing tax cuts and unemployment benefits, it seems likely compromise legislation will reach the president’s desk in the next two weeks. And while there were signs of an emerging consensus on key points, the day’s events made it clear both sides had decided there was still time to bicker.

“Get it done. If not, maybe we’ll have a white Christmas here in Washington,” the president said in an appearance before reporters in which he accused GOP leaders in Congress of “wanting to dicker, wanting to see what they can extract from us in order to get this done.”

But House Speaker John Boehner said the item that drew Obama’s opposition on Wednesday, the proposed Keystone XL oil pipeline from Canada to Texas, “will create tens of thousands of jobs immediately. It has bipartisan support in the House and Senate. It’s pretty clear that the president has decided to push this decision off for a year, conveniently until after his next election.”

While the item unifies Republicans, it may be hard for Democrats to finesse, with environmental groups generally opposed to the project and some labor unions in favor.

At its core, the emerging House bill would extend the existing Social Security payroll tax cut at the heart of Obama’s jobs program, through 2012.

It also would renew an expiring benefit program for the long-term unemployed the president also favors, although at a reduced level from current law.

In addition, Republicans are proposing to avert a 27 percent cut in payments to doctors serving Medicare patients, a provision that Democrats have said privately they are receptive to.

Obama drew a somewhat indistinct line on Wednesday when he said,“efforts to tie a whole bunch of other issues to what’s something that they should be doing anyway will be rejected by me.” Apart from the pipeline, he did not elaborate.

The GOP rank and file has been split over extending the tax cuts.

While some want to avoid raising taxes, others argue that the payroll tax relief enacted a year ago has not helped create jobs, and that its extension would raise the deficit and drain money from Social Security.

Boehner’s strategy has been to add other elements to the measure in hopes of building support from Republicans, including the extension of existing Medicare fees and the pipeline provision, which seemed to take on greater political significance once Obama spoke out against it.

The emerging House bill also is expected to block implementation of a proposed Environmental Protection Agency regulation limiting toxic emissions from industrial incinerators, another potential area for dispute with the White House.

There was unlikely to be much if any controversy over another provision, which would renew for 2012 a law that lets small businesses write off the cost of new equipment purchases immediately. Obama included the extension in his jobs program.

While there is general agreement among leaders of both parties that the legislation must be paid for to avoid raising deficits, there are differences over the details.

Democrats favor imposing a surtax on incomes over $1 million, hoping to depict Republicans — nearly all of whom are opposed — as protecting millionaires at the expense of the middle class.

House Republicans want to raise premium fees on the wealthy for Part B Medicare, a change that they note would fall on many of the same people the Democrats want to tax.

The House bill also would freeze pay for two additional years for federal employees and increase their retirement costs.

Also in the measure is the repeal of nearly $43 billion already approved for the year-old health care law, which stands as Obama’s signature domestic achievement.

There was no suspense in the Senate, where blocking maneuvers left rival payroll tax plans short of the 60 votes needed to advance for the second consecutive week.

The vote on the Democrats’ plan was 50-48, with Sen. Susan Collins of Maine the only Republican in favor.

The Republican measure was turned aside 22-76. A majority of Republicans opposed it, reflecting the party’s internal divisions.

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