Conference committee continues payroll tax struggles

With less than four weeks until the payroll tax cut for 160 million Americans expires, Thursday’s meeting continued to feed the perception that negotiators still had major obstacles to overcome.

The lawmakers on the panel have still yet to really negotiate how to pay for their proposals, and many conferees urged their colleagues to concentrate on the core three issues the panel is discussing.

{mosads}In addition to the payroll tax cut, millions of Americans could see their unemployment benefits end, and doctors serving Medicare patients would see a cut in their reimbursement rate if lawmakers don’t act by the end of February.

“I would urge us to refocus on the three things that most Americans expect us to get done,” said Rep. Xavier Becerra (D-Calif.).

Congressional negotiators did make some progress on Thursday, with House Republicans welcoming a proposal from Senate conferees to tackle lower-tier issues on the federal unemployment insurance system.

The Senate plan accepts some of the unemployment initiatives the House passed in its full-year extension of the payroll tax cut in December, including requirements that beneficiaries be actively seeking work and that states collect overpayments.

But House members from both parties also pushed senators to offer proposals on more controversial parts of the unemployment negotiations, like the education requirements included in the House bill and the maximum length for benefits.

“If we could know a Senate position beginning on these tier-one issues, I think that’d be a necessary step to help us move forward,” said Rep. Dave Camp (R-Mich.), the chairman of the conference committee.

Lawmakers also generally backed a tax provision, included in the House bill, that would allow companies to continue writing off 100 percent of capital investments and called for an extension of Temporary Assistance for Needy Families, a key welfare program. 

On Wednesday, the House overwhelmingly approved a measure mandating that states prevent TANF recipients from using their benefits at strip clubs or liquor stores, a proposal that was also included in last year’s House payroll tax bill.

But Camp did not appear interested in considering issues that were not in either the House or Senate payroll tax bills passed last year — including supplemental welfare grants that have gone to states offering relatively low benefits and expired tax provisions like the research and development credit.

Baucus is among the Democrats pushing to include lapsed tax incentives, commonly known as tax extenders, into a payroll tax deal.

“This is a strict scope of conference, because we have so little time to resolve these issues,” said Camp, who also heads the House Ways and Means Committee.

Republicans did appear interested in including a measure that would force the Environmental Protection Agency to delay and change boiler regulations, a measure that was included in last year’s House bill.

GOP conferees have also been pushing to negotiate the Keystone XL oil sands pipeline in the conference committee.

“The costs are real, and they are both in dollars and in terms of jobs,” Sen. John Barrasso (R-Wyo.) said about the boiler regulations.

Democrats were the ones calling the boiler regulations outside the scope of the conferees’ negotiations this time, and added that policymakers could find a better way to balance the need for job growth and clean air.

“I hope we can put this provision aside and get on with the task that’s before us,” said Rep. Henry Waxman of California, the top Democrat on the House Energy and Commerce Committee.

After Thursday’s meeting, Camp told reporters he had asked conferees to hold time for further meetings next week, and declined to say when the panel would start moving forward on offsets.

With that in mind, and with some conferees even commenting that the panel was making a slow go of it, some are also suggesting that any real progress on the payroll tax cut might have to happen behind closed doors.

Many of the key negotiations on Capitol Hill last year, including on the federal debt ceiling and on deficit reduction, happened outside the public eye.

“As always, in any democratic institution, you have to talk about issues publicly, and you have discussions among members,” said Michigan Rep. Sandy Levin, the ranking Democrat on the House Ways and Means Committee. “That always happens.”