Tax cut gridlock will hurt paychecks
<p>Speaker of the House Rep. John Boehner, R-Ohio, second from left, holds a meeting with the conference committee on the payroll tax cut on Wednesday, Dec. 21, 2011 in Washington. From left, House Majority Leader Rep. Eric Cantor, R-Va., Boehner, Rep. Renee Ellmers, R-N.C., Rep. Fred Upton, R- Mich., Rep. Tom Price, R-Ga., Rep Greg Walden, R-Ore. (AP Photo/Evan Vucci)</p>
WASHINGTON (AP) - Careening toward a politically toxic tax hike, President Barack Obama implored House Speaker John Boehner on Wednesday to get behind a two-month stopgap until a longer deal could be struck early next year, calling it the only real way out of a mess that is threatening the paychecks of 160 million workers and isolating House Republicans.
In a weary Washington, the outreach accomplished little. All sides seemed to end the day where they began, with heavy political and economic consequences at stake.
Boehner remained insistent on a full-year extension of the existing payroll tax cut before Jan. 1, urging Obama to haul Senate Democrats back to town to talk to his chosen negotiators. "Let's get this done today," Boehner told Obama, according to a speaker's aide, who required anonymity to characterize a private conversation.
But the Capitol was emptying out fast, and the Senate showed no inclination to return, having already passed a bipartisan two-month tax cut it thought had settled the matter.
For taxpayers, and for an economy starting to show some life again, the standoff was all holiday gloom.
Barring any action by Congress, Social Security payroll taxes will go up almost $20 a week for a worker making a $50,000 salary - that's $40 less for a typical paycheck or $1,000 over the whole year. Almost 2 million people would lose unemployment benefits as well.
The political risks seemed only to deepen, too, particularly for House Republicans. They appeared poised to take the biggest blame for a tax increase even while pushing for a deeper one.
The reliably conservative editorial page of The Wall Street Journal blasted both Boehner and Sen. Mitch McConnell, the GOP leader, for how they handled the matter. "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," the paper's editorial said.
But the White House made it clear the time for talks were over for this year.
"The negotiating has happened already," presidential spokesman Jay Carney said, referring to the Senate bill the White House insists was sealed with Boehner's blessing.
Boehner disputes that he ever gave a nod of support to the two-month tax cut that many in his caucus oppose. He and other House members call it a poor and unworkable tax policy.
Obama also called the Senate's Democratic leader, Harry Reid, and praised him for the bipartisan tax-cut bill with McConnell that passed the Senate.
Overall, the stalemate has centered on how to pay for another year's tax cut without adding to the deficit. That is the debate ahead - if the two-month deal gets done first.