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House rejects payroll-tax deal. Is it now dead?

The House rejected the Senate's temporary payroll-tax deal Tuesday, leaving no clear way out of the impasse. The House wants more discussions, but the Senate says it's done talking.

President Obama speaks during a surprise appearance in the White House briefing room on Tuesday, saying a 'faction' of Republicans in the House is refusing to vote on a Senate bill that would extend a payroll tax cut for two months.

Carolyn Kaster/AP

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Forget lines in the sand. Congress is breaking out the shovels.

With Tuesday’s near party-line House vote, the House and Senate are at an impasse over how to continue payroll-tax breaks and other expiring measures – and there’s no obvious way out.

If Congress fails to act:

  • 160 million Americans will see a payroll tax hike averaging $1,000 for each taxpayer.
  • 2.5 million jobless workers will lose unemployment benefits.
  • Doctors serving Medicare patients will face a 27.4 percent drop in federal reimbursements.

The Senate on Saturday appeared to have settled the issue with a big, bipartisan vote to extend these expiring measures for two months, 89 to 10. Senators on both sides of the aisle left Washington declaring victory.

Tuesday’s House vote to reject the Senate bill, 229 to 193, revived the impasse. The next step is a conference between House and Senate negotiators to resolve differences between the Senate bill and a House bill the Senate rejected.  

The differences are significant. The House bill extends a pay freeze for all federal workers, cuts unemployment benefits over time from 99 weeks to 54 weeks, reverses an Obama-era rule that bars states from requiring drug tests of jobless applicants, and delays pollution regulations for industrial boilers.

But the Senate has left town and is not scheduled to return until Jan. 23. Moreover, the holidays are a prime time for traveling congressional delegations, especially visits to the troops, meaning they are hard to cut short.


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