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White House, GOP Ratchet Up Rhetoric on ‘Responsible’ Deal for Payroll Tax Cut

December 19, 2011 at 12:00 AM EDT
The way forward on extending the payroll tax cut remained murky Monday as House Republicans vowed to turn back a compromise measure passed by the Senate over the weekend. Gwen Ifill discusses the stalemate with Rep. Jason Chaffetz, R-Utah, and Gene Sperling, a senior economic adviser to President Obama.
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TRANSCRIPT

GWEN IFILL: House Republicans dealt the Senate and the White House a surprise setback today, as leaders vowed to reject a tax cut compromise passed over the weekend.

MAN: On this vote, the ayes are 89; the nays are ten.

GWEN IFILL: For a few hours on Saturday, it appeared a two-month extension of the payroll tax cut was a done deal. But hours after the Senate voted, House Republicans phoned in to a conference call and rebelled. The short-term compromise, they said, lacked serious spending cuts.

By the next morning, House Speaker John Boehner was rejecting the bipartisan Senate bill outright, demanding that Congress enact a full one-year extension of the year-old tax cut.

REP. JOHN BOEHNER, R-Ohio, speaker of the House: Two months is just kicking the can down the road. The American people are tired of that. I think — frankly, I’m tired of it.

GWEN IFILL: Back on Capitol Hill this morning, Boehner drove that point home, saying both sides need to return to the bargaining table and stay as long as needed.

REP. JOHN BOEHNER: The president asked for a full-year extension. We agree with the president. Democrat leaders have said the same thing over the last two weeks, that we should do this for the full year. Why do we always have to go to the lowest common denominator? It’s time for us to do our work. We’re prepared to do our work.

GWEN IFILL: The Senate adjourned for the year after Saturday’s vote. And Senate Majority Leader Harry Reid said they have done their part. In a statement, he said, “I will not reopen negotiations until the House follows through and passes this agreement that was negotiated by Republican leaders and supported by 90 percent of the Senate.”

The White House remained in lockstep with the Senate Democrats.

JAY CARNEY, White House press secretary: We expect the Congress to pass it, the House to pass it. You know, the alternative is Americans waking up on the 1st of January and trying to figure out, okay, how am I going to budget, how am I going to make ends meet with $1,000 less this year? Because the House Republicans refuse to vote for something that 83 percent of Senate Republicans supported.

GWEN IFILL: If the House and the Senate cannot reach agreement, the payroll tax will come back full force for 160 million Americans on New Year’s Day, and jobless benefits also extended in the Senate bill will begin to run out for the long-term unemployed.

So, we asked both sides today whether this latest stalemate can be resolved.

I spoke with White House adviser Gene Sperling, who is director of the National Economic Council, a short time before the House was scheduled to vote on the matter.

Gene Sperling, thank you for joining us.

So, did this rejection by the House catch you totally off guard?

GENE SPERLING, White House National Economic Council: I think the whole country was surprised to hear this.

I mean, Gwen, you had 89 senators, nearly 90 percent of the United States Senate, decide that they were going to meet the president’s basic principle that — with a two-month extension to ensure that Congress did not go home while letting taxes go up on 160 million Americans or letting 2.5 million Americans who are still looking for work get cut off unemployment benefits in the first two months.

This was a compromise that would give the Congress the time to work with the president to do a full-year extension and hopefully more to help get jobs going. And, so, sure, when 90 percent of the United States Senate agree on something — and my view is that about the only things these days 90 percent of the United States Senate agree on are probably mom, apple pie and chocolate ice cream — so, if they supported this compromise, with the speaker of the House knowing it, everybody expected this to pass.

And I think it’s a very sad moment if a small contingency of Republicans in the House of Representatives are now willing and able to hold up this national consensus and do something that could lead taxes to go up on 160 million Americans as we go into the new year.

GWEN IFILL: But it’s one thing for the Senate to agree on something. The House obviously has to agree as well. And, as you know, John Boehner says this is just insufficient. It’s kicking the can down the road.

Why isn’t it?

GENE SPERLING: Well, that’s not what he said.

I think the House — the speaker of the House knew very well the negotiations that were going on. It had 89 votes. He said it was a good deal. So, let’s — we all understand what happened. This was an agreement. This was a compromise for everybody to extend tax cuts for 160 million Americans and unemployment benefits for those looking for work.

It was an agreement. And, again, even perhaps despite the speaker of the House’s endorsement, a small contingency of Republicans is able to hold this up.

And I — I’m still hopeful, Gwen — because I’m an optimist — that, tonight, sanity will prevail and enough Republicans will join Democrats in at least extending tax cuts for 160 million Americans, because I can’t understand why anyone would want to break this compromise and put ourselves in a situation where taxes are going up, when our economy still has a long way to go.

GWEN IFILL: The speaker of the House says, by the way, that he did not endorse this at all. And I wonder whether there were ever any direct conversations with the House speaker and the White House or the Senate Democrats.

GENE SPERLING: You know, Gwen, I think it’s pretty obvious that this type of conversation, negotiation was known by everybody.

And everybody knew this was an agreement going on. So, you know, I think it’s fairly obvious what happened. There was a strong bipartisan agreement which a segment of the House Republicans have blocked or threaten to block now. And, again, I just have to hope that the overwhelming support of the American public for ensuring that taxes are not going up an average of $1,000 next year for a typical family, 160 million working Americans, will prevail, and that common sense will prevail tonight.

GWEN IFILL: Well, if that’s so critical, then why not bring the Senate Democrats back to come up with a compromise?

GENE SPERLING: Well, I think what the president said is, let’s go ahead and do this two-month extension.

It’s not every day that you get 90 percent of Democrats and Republicans to agree on something in this town. We gave a cooling-off period. We gave some space. Let’s pass the two-months extension. And this president is more committed than anyone to working any hour, any time to get the full-year extension.

But let’s not look a compromise, you know, in the mouth. Let’s not reject this. Again, this is 90 percent of the United States Senate, Democrats and Republicans. The overwhelming number of Americans at home would like to see Congress at least extend tax cuts for 160 million Americans and extend unemployment insurance.

And that would give us the time to work out a year-long extension, which is the least this economy needs to get a little more juice for jobs and to start bringing unemployment down.

GWEN IFILL: Pardon me.

The Republicans say you have got the time. You have got two more weeks to do this. And, theoretically, if what you really want is the House to sign on, you folks have been spending the day counting noses, getting those 25, 26 votes you need to get the House Republicans to approve the Senate deal?

GENE SPERLING: Gwen, the president of the United States proposed this over 100 days ago, in the beginning of September.

The president of the United States has been out across this country calling for extending the payroll tax cut, extending unemployment insurance, putting workers back to work, fixing jobs, fixing schools and roads and bridges. So the president was out there early and often.

And we would have loved to have gotten even a bigger deal earlier. But the Republican leader, Mitch McConnell, and virtually the entire Republican Party in the Senate, along with Harry Reid, the Senate majority leader, came to agree that this was the best they could do right now and that this would give us the time that would most assure us the ability to extend the payroll tax cut for 160 million Americans.

Nobody is more for extending this for a year than the president. No one has fought harder. No one was out there earlier.

GWEN IFILL: Mr. Sperling. . .

GENE SPERLING: But this was the best they could do. Let’s at least do this.

GWEN IFILL: . . . take it or leave it at this point?

GENE SPERLING: Take it or leave it?

I think what I would say is that let’s hope that common sense prevails in the House of Representatives today, that enough Republicans, just 20, 30, 40, would join with their Republican colleagues in the Senate and House Democrats and pass this. And let’s have a positive surprise for once.

GWEN IFILL: White House economic adviser Gene Sperling, thank you very much.

GENE SPERLING: Thank you, Gwen.

GWEN IFILL: Shortly after that interview, we sought the view from the House Republican Caucus.

I spoke with Representative Jason Chaffetz of Utah.

Congressman Chaffetz, welcome.

Let’s go back to that Saturday conference call where members of the House Republican Caucus said no way to this deal that had just been voted on that morning in the Senate. What happened? What were the objections?

REP. JASON CHAFFETZ, R-Utah: Well, the speaker threw out what the Senate had done. And then, for literally an hour-and-a-half, there was a chorus of member after member from coast to coast expressing frustration that we, as the House Republicans, and Democrats, too, had joined us in doing the responsible thing and passing a year-long extension.

But that package also had a number of other things in it. And so for the Senate to just line up in punt formation and say, ah, we will just do this in 60 days, we feel like, is a punt of their responsibilities. It’s the irresponsible thing to do. And it exacerbates the problem.

GWEN IFILL: The White House spokesman had been saying today this is something that Republicans saw coming, that the speaker gave kind of a tacit nod to. And, therefore, they say there’s a little bit of Kabuki theater going on here.

What is really going on?

REP. JASON CHAFFETZ: No, I think the speaker did the responsible thing, and he threw it out to the membership of the House.

It’s not controlled by just the speaker. There are members who get to vote on these things. And the way our government is set up — you know, the Senate has been known to make a few mistakes along the way. I happen to think they made a mistake. And so we disagree.

We think that uncertainty is slowing down job creation and job growth in this country. And by punting this for just another 60 days creates uncertainty for workers and for businesses and is not going to help our jobs or the economy to the extent that it could if we would pass something for a year.

GWEN IFILL: Let me be clear about this. What you’re objecting to is the contents of this bill or the length of time that would be implemented?

REP. JASON CHAFFETZ: All of the above.

Part of the problem and the challenge here is, we got rid of things like the doc fix, which is very important to the medical community. We got rid of, for instance, accelerated depreciation or 100 percent expensing for businesses. Those things came out of the bill. Some EPA regulations that we were also going to do, that came out of the bill.

And so the content is problematic. And the fact we’re going to have to revisit this again in February, nobody — nobody wants to do that. I happen to actually agree with the president’s first position on this. He said at the beginning that it was inexcusable to pass anything short of a year. I agree with it. But now he’s changing his mind.

And I just think we have more responsibility and should be doing more in the House, in the Senate, doing our jobs and passing something for a year. That’s what the marketplace needs.

GWEN IFILL: I recall that when the president said he wanted it for a year, Republicans said they didn’t want it at all. And now that he says he wants it for two months, Republicans are saying they want it for a year.

REP. JASON CHAFFETZ: Well, we came up with a compromise.

That’s why we passed out — before the Senate, we passed out a bill in a bipartisan way with overwhelming numbers and sent to it over the Senate. So, we too have done the responsible thing. But we did it for a year, per the president’s request.

GWEN IFILL: Republican Sens. Brown, Heller, Lugar, and Collins all came out today and said this is basically irresponsible, that there are people who are going to see their taxes go up on New Year’s Day as a result of inaction by the House in particular.

What do you say to them?

REP. JASON CHAFFETZ: Well, the House is trying to do the responsible thing and, A., get it passed before the end of the year and, B., pass it for a year.

And I guess is, if you were to talk to most employers and most people, they would agree that a year would be better than two months. I think the president would actually agree with that. So, we’re taking a very responsible position here. The Senate, you know, wants to go have bingo night and go on vacation. We’re saying, no, let’s stay and get this done and get it done for a year.

GWEN IFILL: It sounds like your argument is more with Senate Republicans, since this was a pretty overwhelming vote on the Senate side, not Senate Democrats and not the White House.

REP. JASON CHAFFETZ: Well, all of the above. I just think the Senate as a whole got this wrong.

It happens from time to time. That’s the way our Constitution was set up, so that you had this back-and-forth. This is a healthy part of the process. But now that we’re here, and we’re back in Washington, D.C., going to be voting tonight, let’s get it right and pass it out for a year.

But get some of this other stuff back in here that will help jobs and the economy. That’s what it’s all about.

GWEN IFILL: Any chance that there will be 25 or 26 House Republicans who won’t agree with you and therefore it will go over tonight?

REP. JASON CHAFFETZ: Perhaps. But I, for one, I’m about as conservative as they come. I would be — I disagree with what the Senate did. I think they actually got this wrong.

And I guess there’s always a chance. That’s why they have a vote. That’s why they play the games on Sunday. So, you know – we’ll see.

GWEN IFILL: The people in the Senate, Republicans, a lot of the Senate Democrats, the White House, they are all saying that this is take it or leave it and that, if taxes go up on Jan. 1, it’s essentially your fault.

What do you say to them?

REP. JASON CHAFFETZ: That’s kind of comical. It just sounds like political gamesmanship, take it or leave it. Oh, come on, all these grandiose statements.

The House has passed something. The Senate has passed something. They should go to the conference committee, try to come up with a reasonable compromise between the two, and then allow us to vote on that. That’s a 200-plus year history in the United States of America. We’re not trying to ask for something new. Let’s find something between the two, and I think we can get there.

GWEN IFILL: The flip side of the argument — and I will rephrase it another way — is Jay Carney at the White House saying that what you are in effect doing is, you’re playing politics with the paychecks of 160 million people.

REP. JASON CHAFFETZ: No, I’m trying to do it for a year, where the Senate and the president are now arguing that 60 days is better.

I would disagree with that. There are also some very important things in here, like dealing with the doc fix and dealing with how businesses do expensing and these types of things that will actually help jobs and the economy. If you have a senior at home who is worried about getting somebody on Medicare to find a doctor, and that doctor doesn’t know what the reimbursement rate is going to be, that’s a problem.

And we’re trying to solve it right now because that’s going to hurt our economy moving forward.

GWEN IFILL: If this is an intraparty disagreement, are there conversations going on between senators and members of the House about how to come up with a conclusion that everybody can agree on?

REP. JASON CHAFFETZ: Absolutely. That’s why we’re back in town. I was not expecting to be here in Washington, D.C., but the House Republicans and the House Democrats, we’re back at work. And the Senate should come back to work as well.

GWEN IFILL: Jason Chaffetz, congressman from Utah, thank you very much.

REP. JASON CHAFFETZ: Thanks, Gwen.