Negotiators push for deal, as Reid opens door to House GOP payroll tax cut plan Read

(Reported By www.Foxnews.com)

Bipartisan negotiators pushed toward a potential deal Tuesday to extend the payroll tax cut for the rest of the year, after Senate Democratic Leader Harry Reid opened the door to a House Republican plan that would approve the extension without offsetting the cost.

The string of gestures Tuesday appeared to grease the wheels for negotiations. By late afternoon, sources said lawmakers were nearing a potential agreement, which could address the payroll tax cut and other issues.

Lawmakers are looking at how to not only extend the payroll tax cut but also unemployment insurance and the so-called "doc fix" aimed at keeping Medicare doctors from being hit with a drastic reduction in their federal reimbursement rate. Sources said Tuesday that negotiators were looking at various ways, such as tweaking federal worker retirement benefits, to pay for those other two provisions. One source also said the plan would reduce the maximum duration of jobless aid from 99 weeks to 63 weeks in most states.

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The payroll tax cut still would not be paid for under the framework being discussed. Though the fate of the talks is unclear, negotiators are hoping to include all three provisions in one bill on the floor Wednesday.

The movement comes after House Republicans first offered a standalone payroll tax cut extension with no offsets. The Republican proposal marked a sharp turnabout from the party's prior insistence that the 2-percentage-point Social Security tax cut be paid for in any extension. Democrats, in response, voiced little concern about the fiscal implications of another $100 billion tax cut extension.

Reid said he expected his chamber to approve such a plan, provided House Speaker John Boehner could convince enough members of his own party to go along with it. House Democratic Leader Nancy Pelosi earlier said her caucus could also support the proposed extension bill.

However, the White House and congressional Democrats continued to press Republicans to extend the two other provisions. Reid said he ideally wants all three issues to be resolved in one bill, a goal taken up Tuesday in the bipartisan talks.

The White House likewise pressed for the jobless benefits extension and "doc fix" to be included. White House Press Secretary Jay Carney said "all are important to the economy."

Pelosi also said earlier that failing to address those two other issues "jeopardizes both the ability of seniors to see their Medicare doctors and benefits for millions of Americans who lost their jobs." But she had no qualms about passing the tax cut by itself without offsets, saying the other two issues could be dealt with separately.

"Democrats have always demanded that we extend the payroll tax cut for 160 million Americans without paying for it," Pelosi said. "Paying for it" typically refers to raising taxes in other areas, which Republicans object to, or cutting spending programs, which Democrats object to.

In the Senate, senior Democratic aides told Fox News that Democrats are putting aside their push for a millionaire surtax now that Republicans have offered to extend the tax cut with no strings attached. One aide added, "To be sure, it will live to see another day."

The move to offer the payroll tax cut extension without any accompanying spending cuts or tax hikes puts some Republicans in a difficult spot. Senate Republican Leader Mitch McConnell just last week insisted that the extension be paid for. Asked about the plan on Tuesday, he said, "I can understand the frustration of House Republicans." He added, "I don't have a view on it right now."

Meanwhile, President Obama reprised the aggressive White House-led campaign from last year in pressuring Congress to extend all three of the provisions.

Obama said the public should not take anything for granted and should not "let up" until he signs the bill into law. The president, speaking at the White House, urged Congress to extend both the tax cut and unemployment aid "without drama." He called on Americans to apply pressure via Twitter and letters to Congress, suggesting a 2-point increase in the Social Security tax could damage the economy at a sensitive time.

"No ideological sideshows to gum up the works, no self-inflicted wounds. Just pass this middle-class tax cut, pass the extension of unemployment insurance," Obama said. "Do it before it's too late, and I will sign it right away."

The cut is scheduled to expire at the end of the month.

The back and forth marks the sequel to the frantic, last-minute posturing witnessed at the end of 2011, when the payroll tax cut was first set to expire. Congress in the end agreed to extend the cut for two months, with the aim of letting a bipartisan committee work out a yearlong extension. That extension was paid for with a fee assessed on everyone with a Fannie Mae or Freddie Mac housing loan.

GOP leaders, clearly hoping to avoid the thrashing they received in December when they ran out the clock on the tax cut, are offering a solution fraught with potential pitfalls, especially after Republicans derided Reid last week for indicating he had a "backup plan."

The Committee for a Responsible Federal Budget on Tuesday called the new plan "very troubling."

Rep. Scott Garrett, R-N.J., conceded that the offer to pass the cut without offsetting it "may hurt the GOP" considering its potential impact on deficits. But he said the offer shows Republicans are willing to compromise "when (Democrats) are not."

And he suggested the budgetary hit from the payroll tax cut pales in comparison to the imbalance found in the president's latest budget proposal.

The president's fiscal 2013 budget blueprint has complicated talks. While the president's team claims the budget will cut the deficit by $4 trillion over the next decade, Republicans charge the White House is employing gimmicks -- like counting savings from ending the wars in Iraq and Afghanistan.

And despite claims from the administration that the budgets are curbing the rate of growth, projections still show deficits increasing by $6.6 trillion over the next decade. The administration also has not met its prior pledge to cut the deficit in half by the end of Obama's first term.

Read more: http://www.foxnews.com/politics/2012/02/14/obama-calls-on-public-to-pressure-congress-on-payroll-tax-cut-extension/#ixzz1mOqbUhKe

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Paul Ryan, Jeff Sessions Warn Obama's Budget Could Spur Greek-Style Debt Crisis

WASHINGTON -- President Barack Obama's $3.8 trillion budget plan does nothing to address mounting debt and could lead the country into a European-style crisis, key congressional Republicans said Monday.
"Again, the president has ducked responsibility. He has failed to take any credible action" to address the debt crisis, House Budget Committee Chairman Paul Ryan (R-Wis.) said on a conference call. "All we're getting here is more spending, more borrowing and more debt that will lead to slower economic growth. This is not a fiscal plan to save America from a debt crisis. It's a political plan for the president's reelection."
Obama's budget proposal, released Monday morning, maps out $4 trillion in deficit reduction but spends trillions of dollars on Democrats' priority areas, namely education, infrastructure and transportation. At least $1.5 trillion in deficit reduction would come through raising taxes on the wealthy and removing certain corporate tax breaks.
Senate Budget Committee ranking member Jeff Sessions (R-Ala.), also on the press call, said Obama's budget is "exceedingly deceptive" because it actually creates $11 trillion in new debt. Obama is relying on "budget gimmicks" to claim $4 trillion in deficit reduction, he said, when the reality is his plan would only achieve $273 billion in deficit reduction over 10 years.
"Next year, the United States could be like Greece," Sessions continued, referring to the severe debt crisis faced by that country as a result of uncontrolled government spending.
Ryan similarly warns on the House Budget Committee website: "The President's budget ignores the drivers of our debt, bringing America perilously close to a European-style crisis."
The reality is Obama's budget will not pass Congress and was not ever really intended to do so. It serves more as an outline of Democratic Party priorities and convenient talking points in the lead-up to the November elections. It also gives congressional Republicans something specific to point to, and trash, as they push their own policies ahead of the elections.
Republicans are already criticizing Obama for using what they consider to be accounting tricks to conceal how much money he is really spending. They object to his plan to repeal $1.2 trillion in Budget Control Act cuts without counting that as new spending; his proposal to stop planned cuts to Medicare doctors without identifying how he will offset the costs; and his taking of credit for discretionary caps that are already law. Republicans are also ripping Obama for saying he is saving nearly $1 trillion over the next decade from winding down the wars in Iraq and Afghanistan. Counting that money as "savings" is a gimmick, they say, because those funds would never have been spent.
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Payroll Tax Cut Fight: House GOP Leadership Offers 10-Month Extension Without Offsets

(Reported by Huffington Post)
WASHINGTON -- House GOP leaders announced Monday they were putting forward a "backup plan" that would extend the payroll tax cut for 10 months, while cleaving it from a similar extension of unemployment insurance benefits and what's known as the "doc fix," a measure needed to prevent dramatic cuts in Medicare reimbursements. The plan would not be offset by cuts elsewhere, the announcement said, meaning the cost of the tax cut would be added to the deficit.
The announcement, made quietly on a day Washington is digesting the president's budget proposal, is a stark reversal. Senate Minority Leader Mitch McConnell (R-Ky.) took the floor shortly after the statement was emailed to reporters and spoke only of the budget.
"Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue regarding offsets, unemployment insurance, and the 'doc fix,'" said Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.) and Majority Whip Kevin McCarthy (R-Calif.) in a statement.
The House leaders said in the statement that the plan was not their "first choice."
“If Democrats continue to refuse to negotiate in good faith, Republicans may schedule this measure for House consideration later this week pending a conversation with our members. Democrats' refusal to agree to any spending cuts in the conference committee has made it necessary for us to prepare this fallback option to protect small business job creators and ensure taxes don’t go up on middle class workers."
A Democratic aide familiar with the talks said that Republican leadership had privately conceded the issue in negotiations on Friday, though word had not leaked out over the weekend.
"Whether the payroll tax cut moves separately or as part of the larger package, the Republicans have already said they will give up trying to pay for it by slashing medicare or with other harmful cuts," said the aide.
Another Democratic aide familiar with the negotiations suggested Republicans ought to vote on their offer now and send it to the Senate. "Republicans offered to pass the payroll tax cut without offsets over the weekend, which we considered a major breakthrough. This is just an acknowledgment of their offer. They should send it on over," he said.
President Barack Obama signed a two-month extension of the payroll tax cut, along with unemployment benefits and the Medicare "doc fix," in December. The current deal is set to expire on Feb. 29.
A senior Republican aide emphasized that the plan stems from frustration on the GOP side, and that it isn't yet a done deal.
"It's a possible option to try to pressure Democrats into negotiating in good faith," the aide said.
The GOP leaders' statement noted that the offer was pending discussions from their caucus, which rebelled the last time the leaders tried to cut a payroll deal.
That led to the ugly pre-Christmas standoff and an eventual Democratic victory. Carving the payroll tax out of the equation would at least prevent a similar debacle for the GOP, leaving unemployment insurance and the "doc fix" as the remaining points of contention.
UPDATE: 3:25 p.m. -- White House Press Secretary Jay Carney dodged several questions during Monday's daily briefing about whether President Barack Obama could support the idea of decoupling unemployment insurance from the payroll tax cut extension.
"It's a hypothetical proposal put up that they said they might do," Carney said of the GOP plan. "Let's just see how this process plays out."
Carney added that the unemployment insurance extension and the "doc fix" are "equally important" as the payroll tax cut extension.

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