Congress takes up payroll tax after GOP retreat

(CBS/AP)?

WASHINGTON - Capping a full retreat by House GOP leaders, Congress will convene Friday in hopes of approving a stopgap measure renewing payroll tax cuts for every worker and unemployment benefits for millions ? despite serious opposition among some tea party Republicans.

Friday's unusual session, if all goes according to plan, will send a bill to President Obama to become law for two months and put off until January a fight over how to pay for the 2 percentage point tax cut, extend jobless benefits averaging around $300 a week and prevent doctors from absorbing a big cut in Medicare payments.

Those goals had been embraced by virtually every lawmaker in the House and Senate, but had been derailed in a quarrel over demands by House Republicans for immediate negotiations on a long-term extension bill. Senate leaders of both parties had tried to barter such an agreement among themselves a week ago but failed, instead agreeing upon a 60-day measure to buy time for talks next year.

The decision by House Speaker John Boehner, R-Ohio, to cave in to the Senate came after days of criticism from Obama and Democrats. But perhaps more tellingly, GOP stalwarts like strategist Karl Rove and the Wall St. Journal editorial board warned that if the tax cuts were allowed to expire, Republicans would take a political beating that would harm efforts to unseat Obama next year.

Friday's House and Senate sessions are remarkable. Both chambers have recessed for the holidays but leaders in both parties are trying to pass the short-term agreement under debate rules that would allow any individual member of Congress to derail the pact, at least for a time.

House tax deal vote needs unanimous consent

"Every single one of them would have to sign off on it," explains CBS News congressional correspondent Nancy Cordes. "That's a tall order, because there are many House Republicans who, as you can imagine, are very angry, who feel they caved too quickly. If any one of them objects they'll have to come back and vote next week."

The developments were a clear win for Obama. The payroll tax cut was the centerpiece of his three-month, campaign-style drive for jobs legislation that seems to have contributed to an uptick in his poll numbers ? and taken a toll on those of congressional Republicans.

Obama, Republicans and congressional Democrats all said they preferred a one-year extension but the politics of achieving the goal, particularly the spending cuts and new fees required to pay for it, eluded them. All pledged to start working on that in January.

"There remain important differences between the parties on how to implement these policies, and it is critical that we protect middle-class families from a tax increase while we work them out," Senate Majority Leader Harry Reid, D-Nev., said.

House GOP arguments about the legislative process and what the "uncertainty" of a two-month extension would mean for businesses were unpersuasive, and Obama was clearly on the offensive.

"Has this place become so dysfunctional that even when we agree to things, we can't do it?" Obama said. "Enough is enough."

The top Senate Republican, Mitch McConnell of Kentucky, was a driving force behind Thursday's agreement, imploring Boehner to accept the deal that McConnell and Reid had struck last week and passed with overwhelming support in both parties.

Meanwhile, tea party-backed House Republicans began to abandon their leadership.

"I don't think that my constituents should have a tax increase because of Washington's dysfunction," freshman Rep. Sean Duffy, R-Wis., said.

If the cuts had expired as scheduled, 160 million workers would have seen a tax increase of $20 a week for an average worker earning about $50,000 a year. And up to 2 million people without jobs for six months would start losing unemployment benefits averaging $300 a week. Doctors would have seen a 27 percent cut in their Medicare payments, the product of an archaic 1997 cut that Congress has been unable to fix.

Even though GOP leaders like House Majority Leader Eric Cantor, R-Va., promised that the two sides could quickly iron out their differences, the truth is that it'll take intense talks to figure out both the spending cuts and fee increases required to finance the measure.

Just hours before he announced the breakthrough, Boehner had made the case for a yearlong extension. But on a brief late afternoon conference call, he informed his colleagues it was time to yield.

"He said that as your leader, you've in effect asked me to make decisions easy and difficult, and I'm making my decision right now," said Rep. Jack Kingston, R-Ga., paraphrasing Boehner's comments.

Kingston said the conference call lasted just minutes and Boehner did not give anyone time to respond.

There was still carping among tea party freshmen upset that GOP leaders had yielded.

"Even though there is plenty of evidence this is a bad deal for America ... the House has caved yet again to the president and Senate Democrats," Rep. Tim Huelskamp, R-Kan., said. "We were sent here with a clear set of instructions from the American people to put an end to business as usual in Washington, yet here we are being asked to sign off on yet another gimmick."

Almost forgotten in the firestorm is that McConnell and Boehner had extracted a major victory last week, winning a provision that would require Obama to make a swift decision on whether to approve construction of the Keystone XL oil pipeline, which would bring Canadian oil to the U.S. and create thousands of construction jobs. To block the pipeline, Obama would have to declare that is not in the nation's interest.

Obama wanted to put the decision off until after the 2012 election.

House Republicans did win one concession in addition to a promise that Senate Democrats would name negotiators on the one-year House measure: a provision to ease concerns that the 60-day extension would be hard for payroll processing companies to implement.

Source: http://feeds.cbsnews.com/~r/CBSNewsGamecore/~3/L_MqMLVKBDA/

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