Obama Raises the Stakes on the Payroll Tax Impasse

A risky decision by President Obama to connect the fate of a payroll tax break and an omnibus spending bill will be tested today as the Republican-controlled House votes on the payroll tax proposal.

President Obama has instructed Senate Majority Leader Harry Reid to "not let Congress pass the spending bill and go on vacation before there is an agreement on payroll," Politico's Ben White reports this morning. But if House Republicans manage to generate enough votes for their payroll tax proposal, which the President has said he would veto, "it can't be ruled out that the House will go home for the year, leaving the Senate with a 'take-it-or-leave-it' proposition on the tax issue," reports Politico.

The risky calculus has prompted a last minute push by House Democrats to warn their colleagues against voting for the bill, even though it includes some measures they approve of, such as a proposal to fast-track the Keystone XL pipeline. As The Hill's Russell Berman reports, "House Democratic leaders are urging their members to vote against the GOP’s payroll tax bill ... [Republicans] expect some defections, but Democrats could lose some votes as well. Rep. Dan Boren (D-Okla.), a senior member of the Blue Dog Democrat coalition, announced Monday he would support the bill." The House will be in session starting at 10 a.m. and voting is expected between 1:30 and 2:30 p.m.—and it's possible Republicans don't have enough support for a strong showing, according to Politico's Manu Raju and Jake Sherman. "Majority Whip Kevin McCarthy (R-Calif.) ... privately told Boehner and GOP leadership Monday that he hadn’t yet secured the votes for the bill." they report. "Shortly after McCarthy told Republican leaders Monday that they had not locked up support for the extender package, Boehner organized an evening news conference to announce that he was going forward with a vote Tuesday."

It's not clear who has more leverage over the situation, reports Politico's David Rogers. "The government is due to run out of money again Friday, when the latest stopgap continuing resolution expires. And the House and Senate Appropriations committees have a huge institutional investment now in seeing the bill through - whatever happens in the payroll tax fight," he writes. "Indeed, the maneuvering may be most revealing of the pent-up anger felt by Reid and shared by the White House. Given Congress's low standing in public polls, the president could yet weigh in-and prolong the fray - by raising his own objections to provisions, such as Cuba travel restrictions - which Obama has vowed to veto in the past if presented to him separately."

In a worst case scenario (for lawmakers), the fight could extend into the holiday recess, Sherman and Raju report.  "Government funding runs out at the end of the day Friday, and Democratic aides didn’t rule out the option of pushing a short-term extension that would allow the fight to extend until the week before Christmas."