US Hill’s Payroll Tax Cut Negotiations Move Into Critical Phase

–Hill Tax Chiefs Seek To Intensify Talks, Quiet Partisan Rhetoric
–Senate Democratic Leaders Say Deal Is Needed Within Week
–House Speaker Boehner: ‘Significant Concerns’ If Dems Want Deal

By John Shaw

WASHINGTON (MNI) – So far this has not been a banner week for those
hoping for swift movement toward a payroll tax-cut extension agreement.

The fourth meeting of House-Senate conference committee to craft an
accord was held Tuesday and was full of acrimony and recriminations
rather than progress and conciliation.

“There is an element of deja vu to this process,” White House
press secretary Jay Carney said Wednesday about the continuing impasse
on the payroll tax-cut extension package.

Senate Minority Whip Jon Kyl, a member of the conference panel,
offered a grim assessment of where things stand shortly after the
meeting ended Tuesday.

“The reality is that as of today we haven’t made much progress and
time’s a wastin’,” Kyl said.

Throughout Tuesday’s session, both House Ways and Means Committee
Chairman Dave Camp and Senate Finance Committee Chairman Max Baucus
pleaded for negotiators to approach the talks with both urgency and
flexibility.

And Camp urged congressional leaders to tone down their sharply
partisan rhetoric.

“Let’s let the conferees work,” Camp said. “I don’t think the
comments from either side of leadership — from either body — are
particularly helpful,” Camp said.

Camp said there is a general consensus that the package should
extend the payroll tax cut, renew unemployment insurance benefits and
prevent a deep cut in Medicare reimbursements for doctors.

However, he added that Tuesday’s session made it clear that
Democrats oppose the funding proposal that Republicans offered to pay
for the $150 billion to $160 billion package. Camp urged Democrats to
offer their own plan.

Baucus said that despite the contention of Tuesday’s session, he is
confident the talks will succeed.

“We will find a solution that has quite significant bipartisan
agreement — about that I’m sure,” he said.

Baucus said the parties need to reach an overall agreement on the
package by “the first part of next week.”

While Camp and Baucus have been calling for intense work by their
conference committee for an agreement, congressional leaders continue to
hurl thunderbolts at each other.

“We have significant concerns about whether Senate Democrats are
really willing to step up and work with House Republicans on the payroll
tax cut bill,” House Speaker John Boehner said Tuesday.

“One can only wonder why Senate Democrats are dragging their feet
and not coming up with a plan,” Boehner added.

Senate Majority Leader Harry Reid jabbed back at Boehner, saying
the stalemate of late last year over this issue has returned.

“We are right back to where we were last December,” Reid said,
referring to the impasse on extending the payroll tax cut.

“We have seen this movie before,” Reid said, adding he is
“very, very skeptical” that Republicans really want an agreement.

Reid said that unless an agreement is reached by early next week he
will offer his own plan.

“We need an agreement next Monday or Tuesday,” Reid warned.

Senate Minority Leader Mitch McConnell said congressional Democrats
have “linked up” with the White House to prevent any agreement and then
plan to blame the impasse on Republicans.

“Our friends on the other side are trying to blow the legislation
up,” McConnell added.

The House-Senate conference committee has been working for several
weeks to draft a payroll tax cut package.

The talks are focusing on a $160 billion package to extend the
payroll tax cut, extend unemployment insurance benefits and prevent a
deep cut in Medicare reimbursements for doctors.

Congress passed a two-month extension of these programs which will
expire at the end of February. Both President Obama and congressional
leaders say they want to pass a one-year extension of these programs,
but there are scores of policy details to resolve as well as a budget
offset package of at least $160 billion.

House Republicans recommend paying for the package by extending a
federal employee pay freeze, increasing Medicare premiums for upper
income beneficiaries, and cutting funds from the new health care law.

Senate Democrats prefer to pay for the package by imposing a surtax
on those with incomes over $1 million.

Reid has made it clear that the surtax would be the key funding
mechanism for his plan — if he decides to introduce it.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$]