The House and Senate are drawing lines in the sand on the contentious payroll tax cut, with both sides saying that will refuse to negotiate until their opponents give them what they want. On Tuesday, House Republicans are planning to kill a temporary two-month extension of the tax cut that the Senate passed on Friday by a rare 89-to-10 margin. Leaders in the lower chamber are insisting on an extension that covers all of 2012, but is also paid for by spending cuts in other areas.
Meanwhile, on the other side of the Hill, Senate Majority Leader Harry Reid says he will not negotiate on a long-term solution until the House passes the Senate's two-month fix. If the two sides can't reach an agreement by the end of the year, the cut automatically expires, raising payroll taxes for most Americans by two percent.
So now we have a standoff, between those Congresspeople who don't want to get caught raising taxes on Americans in an election year and the hardliners who continue to insist on budget cuts and deficit reduction at every turn. Unfortunately for House Speaker John Boehner, the lines are not so easily drawn this time. Even some Republicans Senators are speaking out against his plan, saying the House needs to approve the temporary fix so that their side doesn't get blamed for raising taxes on middle class Americans.
For Democrats that calculation is simple — paint Republicans into a corner by saying its their fault you lost money — but unfortunately that strategy hasn't been very successful. As we've seen during previous budget fights (the Bush tax cuts last winter, the debt ceiling this summer) threatening the Democrats and the President with financial chaos usually causes them to give in. The House Republicans are standing on their own principles (government done the right way, without "kicking the can") and also gambling (probably correctly) that President Obama will take the heat for smaller paychecks next year.
If that gamble turns out to be incorrect, however, it's a huge blow to GOP fortunes. And it's not even clear that Boehner will be able to make it happen. The House won't technically be voting on the Senate bill, because Boehner is unlikely to get the votes he needs to defeat it outright. (Instead, they'll be rejecting the measure to request a conference with Senate members, a technical procedure that allows House members to avoid going on record against a tax cut.) Playing chicken with legislation requires keeping the rest of the your hen house in line, and at the moment that skill is being tested. Of course, the Democrats aren't much better at it, and no one wants to be caught holding the bag when taxes go up. The standoff may go down to the wire, but someone's gotta give.