NPR Story
6:00 am
Sun December 11, 2011

Congress May Be Tied To The Hill For Holidays

Originally published on Sun December 11, 2011 7:58 am

Transcript

AUDIE CORNISH, HOST:

Whoever winds up winning the Republican nomination will get a chance to be president, and one of the most trying parts of that job is dealing with Congress. Joining us now is NPR congressional correspondent David Welna to walk us through the issues still on the table as Congress approaches its Christmas recess. Hi there, David.

DAVID WELNA, BYLINE: Hi, Audie.

CORNISH: So far this month it seems like the payroll tax holiday has been the main topic of discussion on the Hill, but there hasn't been a whole lot of progress. So, give me a sense of where things stand now.

WELNA: Well, Audie, things are pretty deadlocked right now. You have this very strange situation up here where Democrats are arguing for extending a tax cut - something they haven't been doing for the past decade or so - and Republicans, who've been big defenders of tax cuts, are afraid that they'll be accused of raising taxes. And so, in the Senate they have spent the past two weeks arguing over competing proposals that both extend the tax rate but there are significant differences. The Democrats would like to increase the tax rate by 50 percent for employees; Republicans want to keep it at the same level. But Democrats say they would want to pay for this by taxing millionaires - about 2 percent on their income - Republicans say that would be terrible. That would hurt job creation. And so, in the end both proposals have been voted down now twice in the Senate. Things are not moving very much from where they were even a week ago in the Senate.

CORNISH: So, what does that mean for those of us who are going to be looking at our paychecks in the next couple of weeks? Are people going to see taxes rise? I know President Obama wants to remind voters about that every chance he gets, basically when he's been out pushing Republicans on this.

WELNA: Yes. I mean, especially if in fact this payroll tax holiday ends at the end of the year, he would say this is your Christmas gift from Republicans. And, of course, Republicans don't want that. So, in the house they've had quite a pickle because there are a lot of Tea Party sympathizers who think that the payroll tax holiday is not a good idea at all. And they don't want to extend it. So, Speaker John Boehner has had to find some other ways to get them onboard. And the way that he's doing it is he's finding things that President Obama doesn't want, and the main thing is an oil pipeline from Canada to Texas that's been proposed. It's called the Keystone Excel pipeline. President Obama at the White House said he would reject any proposal that included this pipeline, and Speaker John Boehner the next day came out with this proposal explicitly including the pipeline. So, you've got this scenario of the House voting on Tuesday and probably approving an extension of the payroll tax cut but it will have the baggage of this pipeline on it also and they'll be sending it over to the Senate and daring Senate Democrats to vote against it and be accused of having stopped the payroll tax cut extension. So, you see, the politics of this is pretty complex and in the end there's going to have to be some other deal probably to get that payroll tax cut extended.

CORNISH: So, David, we've also got the emergency unemployment insurance benefits that are set to expire at the end of the month as well. So, what's the prospect of Congress dealing with that?

WELNA: Well, you know, this is something that Congress has never failed to do, to extend those benefits. The one big difference now is that Republicans are demanding that there be some kind of an offset to pay for them. But if those benefits run out, millions of people who've lost their jobs could see their sole source of income end in January. And this could have an effect on the larger economy. So, I think there's a will in Congress to extend those benefits. Just how they're going to do it isn't clear yet.

CORNISH: And there's one more deadline, right, that Congress has to meet this week.

WELNA: Yes. It's a much more immediate deadline. On Friday, temporary spending bill will run out and if Congress does nothing, we will have a government shutdown. This time, I don't think that we are going to have a shutdown because it looks like there is going to be an agreement for something that will keep the government going at least into next year and possibly for the entire fiscal year. And whether that will include an extension of the payroll tax cut remains to be seen. Each year it seems that they get closer and closer to the brink, and the brink this year is December 31st.

CORNISH: NPR congressional correspondent David Welna. Thank you so much.

WELNA: You're welcome, Audie. Transcript provided by NPR, Copyright NPR.