Washington Beat: Political Snags Abound As Payroll Tax Deadline Nears

By: Erin Billups

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The committee assembled to reach a bi-partisan deal to extend the payroll tax holiday is just a week away from its self-imposed deadline, and lawmakers seem to be log-jammed around the same issues that threatened the deal last year. NY1's Erin Billups filed the following report.

Members of the House-Senate committee charged with reaching a bi-partisan deal to extend the payroll tax cut, unemployment insurance and certain medicare payments for doctors say talks have stalled.

One upstate Republican conferee even saying he'd be willing to drop the unemployment insurance extension.

"I'm willing to let unemployment expire. Go back to 26 weeks at this point and time, because protecting the payroll tax rate and protecting Social Security has to be the priority," said Congressman Tom Reed of Corning.

Negotiations began falling apart after Senate Democrats submitted their unemployment insurance plan to the committee Wednesday night, rejecting key GOP proposals like requiring recipients get a GED and drug screenings.

"Senate Democrats believe that unemployment is really a handout program. We've taken the position that unemployment should be a hand-up program," said Reed.

Reed says Democrats also rejected the GOP's pay-fors which include a year-long salary freeze for federal employees and higher premiums for wealthy Medicare participants.

Democrats maintain that the $160 billion bill should be paid for by repealing the Bush tax cuts for the rich, which they argue increased the deficit.

"I'm for paying for it as the gentleman well knows by a surtax on those who have done the best," said House Minority Whip Steny Hoyer.

"It should come from a place that does not harm the middle class," added House Minority Leader Nancy Pelosi.

Republicans and Democrats accuse each other of stalling -- finger pointing that echoes the fight that nearly killed the deal in December.

"There's been no willingness on the part of Leader Reid and his conferees to even offer a suggestion as to how to resolve this impasse," said House Majority Leader Eric Cantor.

"They don't really think, as seemed to be reflected in the last year, that this payroll taxes cut ought to be extended," said Hoyer.

The committee is still hoping to reach a deal by February 17.

The current extensions expire at the end of the month.