By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — House lawmakers were poised Tuesday to reject a Senate-passed extension of the payroll-tax cut, forcing a fresh clash with the upper chamber and leaving the fate of the break up in the air shortly before it is set to expire.
The Senate bill, approved 89-10 in a rare session last weekend, would extend the current 4.2% payroll-tax rate for two months. House Republican leaders are calling instead for a one-year extension and are urging senators to hammer out a compromise bill.
Senate Democratic Leader Harry Reid, however, says he doesn’t intend to restart talks with the House and that a two-month extension would give the two chambers time to work out a yearlong deal.
Without action by the end of the year, the payroll tax is set to revert to 6.2% on Jan. 1, costing the average family $1,000.
The Senate bill passed on Dec. 17 would also force President Barack Obama to make a decision in the next two months on whether to build a controversial U.S.-Canada oil pipeline.
House Democratic Leader Nancy Pelosi said Tuesday morning that “the extreme tea-party element” of the Republican party is holding up the payroll-tax cut extension and stressed that 39 Senate Republicans backed the bill that passed their chamber last weekend.
Rep. Jeb Hensarling, who chairs the House Republican Conference, said on CNN that an agreement can be worked out with Democrats “in a couple of days.”
“The question is, are you going to do it for a full year or are you going to punt the ball down the road like Washington does so often?” he said.
The House vote on Tuesday will be on whether to reject the Senate’s bill and call for a conference committee between the House and Senate.
