Iowans split on party lines as House rejects Senate payroll tax cut bill

The payroll tax cut, extended unemployment benefits, and a “doc fix” affecting Medicare reimbursements look more likely to expire on December 31 after today’s votes in the U.S. House. Republicans voted to go to conference to resolve differences between their approach to extending the payroll tax cut and the bill the U.S. Senate approved on Saturday.  However, Democrats don’t plan to appoint anyone to the conference committee.

Details on today’s votes and reaction from members of Iowa’s House delegation are after the jump.

Senate leaders expected the House to go along with the two-month extension the upper chamber passed over the weekend, but House Speaker John Boehner came out against the deal after rank and file members of his caucus objected. House Republicans favor attaching various conditions to a yearlong extension of the payroll tax cut, unemployment benefits and the “doc fix.”

The Senate has already adjourned for the winter holidays, and Senate Majority Leader Harry Reid said today in a statement that he would resume negotiating with Republicans only after the House “passes the bipartisan [Senate] compromise.” For that reason, a vote to create a conference committee would likely result in the tax cuts expiring on December 31.

A Republican motion to go to conference over differences on this legislation passed by 229 to 193 this afternoon (roll call). Iowans Bruce Braley (IA-01), Dave Loebsack (IA-02) and Leonard Boswell (IA-03) all voted against this motion. In fact, not a single House Democrat supported it. Tom Latham (IA-04) and Steve King (IA-05) voted for the motion, as did all but seven of their House GOP colleagues present.

Shortly afterward, the House rejected a Democratic motion to instruct conferees on the payroll tax legislation, if a conference committee meets. That motion went down on a 183 to 238 vote (roll call), with Iowans split on party lines again. Pete Kasperowicz noted at The Hill’s blog,

Republicans mocked the Democratic motion, citing comments from House Democratic leaders that Democrats in both the House and Senate would not name any Democrats to the conference.

That’s a fair point. There won’t be a functioning committee to instruct if House Minority Leader Nancy Pelosi and Reid stick to their plan not to appoint any Democrats to the body.

Finally, the House passed

a Republican resolution expressing the sense of the House that Congress should approve a bill extending the payroll tax holiday and unemployment insurance along the lines of what House Republicans approved earlier this month.

The resolution is meant to demonstrate support for the House bill, which extends and reforms these programs for a year and pays for the extensions with cuts to discretionary spending. House Republicans spent the day arguing that their proposal is better than the Senate bill, which extends these programs for just two months.

Members voted 226-195 in favor of the resolution. All Democrats voted against it, along with eight Republicans.

The payroll tax affects approximately 160 million Americans and has been the focus of most of the political commentary to this month’s maneuvering. However, the impact of letting unemployment benefits expire would also be profound. An estimated “1.8 million Americans will face a cutoff in unemployment benefits in January if Congress doesn’t extend emergency federal unemployment insurance (UI) before returning home for the holidays. Click that link to view maps showing how many weeks of unemployment benefits are available in each state now, and how many would be available as of January 1. Iowa currently provides a maximum 73 weeks of unemployment benefits, but that would drop to 26 weeks without Congressional action by the end of this month.

I’ve posted comments from members of Iowa’s House delegation below.

Statement from Bruce Braley:

“Extending the middle class tax cut that keeps $1,000 in the pocket of the average Iowa family is good for the economy and good for our country.

“Playing politics over this issue does nothing other than put families at risk of seeing their taxes go up on January 1st.

“That’s why I supported the Republican plan to extend the middle class tax cut last week.  And it’s why I just voted with 89 out of 100 Senators, including Senators Harkin and Grassley, on a bipartisan compromise to extend the middle class tax cut.  This issue shouldn’t be about Republicans or Democrats.  It’s good for Iowa.  And Iowans need Congress to come together and finish the job.”

Braley has voted in support of a middle class tax cut extension every time the issue has come up in the House for a vote.

Statement from Dave Loebsack:

Washington, D.C. – Congressman Dave Loebsack released the following statement today regarding the House Republicans vote against the bipartisan Senate compromise to extend the pay roll tax cut.  If the tax cut is not extended by December 31st, a typical American family making $50,000 a year will see their taxes raised by $1,000.

“Today’s votes demonstrate, once again, that the cycle of political games and finger pointing trumping the interests of working Iowans is never ending.  The House Republicans’ refusal to reach any reasonable compromise requires a short term extension to avoid a tax increase for working Iowans.  Unfortunately, cooler heads did not prevail and legislation guaranteeing Iowans would not see a tax increase come January 1st was defeated because of politics.

“As one of only six members of the entire House of Representatives who bucked the leaders of both parties to support putting the paychecks of working families ahead of politics, I have demonstrated my willingness to compromise. Congress must end these games and support middle class families.  This holiday season, the American people cannot afford a $1000 tax increase and I have called on Speaker Boehner to keep the House in session until this crisis is adverted.”

Earlier today, Loebsack wrote to House Speaker John Boehner, calling on him to keep the House in session until the payroll tax cut, Medicare reimbursements and unemployment insurance are extended.  A copy of the letter can be found here.

Statement from Leonard Boswell:

“While the bipartisan Senate compromise was far from what I had hoped for, it prevents a tax increase on the middle class and allows for future discussions on the one-year extension to take place. House Republicans are not allowing the will of the body, in fact the will of the American people, to prevail but instead are playing Russian roulette with the livelihoods of millions of Americans by threatening their paychecks, their Medicare, and the unemployment benefits that are helping many Americans in their time of need.

“Furthermore, a group of Republican Senators and Republican House members are urging the House to stop playing politics. Senator Dick Lugar (R-IN) even said this is best for the country as well as for all the individuals who are affected. House Republicans are turning their backs on the middle class and would rather support the polarizing agenda of the tea party. They continue to toy with the idea of raising taxes on hardworking Americans just days before the Christmas holiday.”

Statement from Tom Latham:

CITING THE NEED FOR CERTAINTY, LATHAM CALLS FOR FULL ONE-YEAR EXTENSION OF PAYROLL TAX CUT

SHORT-SIGHTED AND TEMPORARY EXTENSION WOULD CREATE ECONOMIC HAVOC AND MAKE TAX COMPLIANCE MORE DIFFICULT

Washington, Dec 20 – Iowa Congressman Tom Latham reiterated his commitment to a full-year extension of the payroll tax cut Tuesday before the U.S. House of Representatives was scheduled to vote on legislation to send different proposals passed by the U.S. House and Senate to a conference committee to work out the differences.

The House is expected to consider the legislation in response to a Senate-approved proposal that falls far short of the extension of the one year payroll tax holiday called for by President Obama and economic experts.  The Senate measure extends the payroll tax by only a temporary two months leaving taxpayers and employers in the dark regarding their long-term tax future.  The Senate proposal came under fire throughout the day on Monday for its short-sighted approach that would lead to confusion for the American people and make tax compliance more difficult.

ABC News reported Monday that officials from the policy-neutral National Payroll Reporting Consortium, Inc. expressed concern to members of Congress that the two-month payroll tax holiday passed by the Senate and supported by President Obama cannot be implemented properly.

NPRC President Pete Isberg wrote to the key leaders of the relevant committees of the House and Senate on Tuesday, telling them that “insufficient lead time” to implement the complicated change mandated by the legislation means the two-month payroll tax holiday “could create substantial problems, confusion and costs affecting a significant percentage of U.S. employers and employees.”

“We don’t need any more uncertainty in our economy,” Congressman Latham said. “The Senate is writing tax policy that is equal to sudden stop- and-go traffic that will only create more confusion for the American taxpayers and job creators who are trying to turn around an economy mired in doubt.  Such short-term fixes are completely irresponsible, and, as President Obama has noted, Congress should go nowhere until we extend the payroll tax break for a full year.”

Last week, Congressman Latham supported House-approved legislation that contained a fully paid-for one-year extension of the payroll tax cut that would protect working Americans from a tax increase without adding to the national debt.  The House proposal contained a multitude of bipartisan ideas, many of which had previously received backing from the White House, but the Senate refused to approve the common-sense legislation.

“We need to provide a yearlong guarantee to the American people that their taxes won’t go up,” Congressman Latham said.  “It’s time for Congress to put aside petty political differences to do the right thing for the American people.  A real economic recovery can’t take root until we move beyond this uneven, piecemeal approach to fiscal and tax policy.  I stand ready to work with any of my colleagues in Congress – regardless of party affiliation – and with the White House to make sure working American families don’t wake up to a tax hike on January 1.”

I will add reaction from Steve King if I see a press release or public comment from him.

I sought comment about the payroll tax cut extension from two potential challengers to Braley in the new first Congressional district, Rod Blum and Ben Lange. Only Blum responded; here are his thoughts.

Cutting Social Security tax rates continues to siphon away money that should be going to Social Security. As we all know, Social Security is currently cash flow negative, meaning it is paying out more than it brings in.

Extending unemployment benefits DOES have a major impact – it extends the average length of time someone stays unemployed. We would all agree that our country needs a short-term safety net for those that have lost their jobs, but the safety net has turned into a hammock.

Cutting federal Medicare payments to physicians is most likely a bad idea in the short term.  In the long term we need more competition in healthcare and the patient needs to become a true consumer of healthcare.

If Congress decides to approve any or all of these items, one fact remains:  they need to be offset with other spending cuts.

The insanity has to stop – our future is increasingly looking like Greece’s and Italy’s future.  My children should not be saddled with the debts of this Congress who do not have the intestinal fortitude to say no.

If that “hammock not a safety net” metaphor sounds familiar to you, it may be because Steve King opposes extending unemployment benefits on similar grounds. He said in early 2010, “We shouldn’t turn the ‘safety net’ into a hammock.”

I haven’t seen any comments today from King’s Democratic challenger, Christie Vilsack, but earlier this month she called on Congress to extend the payroll tax cut.

UPDATE: Here’s an excerpt from a “policy memo” released on December 20 by Braley’s Chief of Staff John Davis:

There is significant confusion surrounding the recent debate on the extension of the payroll tax cut, extension of unemployment insurance and preventing the pending cut to physician Medicare reimbursement rates.  These three issues are urgent. They will impact millions of middle class families, unemployed Americans and Medicare patients. The deadline for action on all three is January 2012.

The Details:

·         Extension of Payroll Tax Holiday

o   Currently, employees pay a payroll tax of 4.2% of their income to Social Security, on wages earned up to $106,800.

o   On January 1, 2012, if Congress does not pass an extension of the “Holiday,” then the payroll tax will revert back to previous law, which is a 6.2% tax on those same wages

o   This equates to a 2% tax increase, if Congress fails to extend the Payroll Tax Holiday.

o   This tax impacts 160 million Americans nationwide.  For an Iowan making $50,000 per year, this equates to a $1,000 tax increase.

·         Unemployment Insurance

o   Congress must reauthorize provisions that maintain long-term unemployment benefits for laid-off workers.  These provisions will begin to expire on January 3, 2012 if Congress does not pass an extension.

o   Currently, states provide up to 26 weeks of unemployment benefits, so those who will be harmed by the expiration of the federal provisions are the long-term unemployed (ie, those unemployed for longer than 26 weeks).

o   Without Congressional action, approximately 6,600 Iowans will lose their long-term unemployment benefits.

·         Medicare Reimbursements to Doctors

o   If Congress does not act, a scheduled 27% cut in Medicare reimbursements will occur on January 1, 2012, due to the flawed Sustainable Growth Rate (SGR) in the Medicare formula.  This means that every time a doctor sees a Medicare patient, the doctor would receive 27% less in his Medicare reimbursement.

o   This could harm Medicare patients’ (seniors) access to care, if doctors no longer find it cost-effective to accept Medicare patients.

About the Author(s)

desmoinesdem

Comments