President and Republicans Deadlocked Over Tax Cuts

Posted December 21st, 2011 at 2:30 pm (UTC-5)
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U.S. President Barack Obama has spoken by phone with Speaker of the U.S. House of Representatives John Boehner, urging House passage of a two-month extension of a payroll tax cut that the Senate approved last week.

The White House released a statement Wednesday saying Mr. Obama urged passage of the two-month extension as a stopgap measure. He said Democrats and Republicans could then keep working on a plan to implement the one-year extension that the Republicans favor.

Speaking to reporters with the committee he has appointed to negotiate with the Senate, Boehner called on Democrats to re-open discussions on the plan, although the Senate is already in holiday recess. House Democrat Steny Hoyer said Wednesday that polls show the American people support the plan the Senate passed last week.

The payroll tax, which funds the national retirement system, is set to rise in 10 days if the tax cut is not extended. That means millions of U.S. workers could see a decrease in their take-home pay and others could lose their unemployment insurance.

The U.S. House of Representatives Tuesday side-stepped a vote on the temporary two-month extension, calling instead for a new round of negotiations on a full-year extension.

Republican House Speaker John Boehner told reporters afterward that Republican lawmakers in the House had done their job, placing the blame on lawmakers in the U.S. Senate.

The failure of House Republicans to pass the Senate bill sparked an angry reply from U.S. President Barack Obama on Tuesday.

He said the American people are tired and weary of gamesmanship and deserve better.

Senate leaders have said they have no plans to negotiate a new deal before the end of the year.

The White House says 160 million Americans will see their taxes go up by about $1,000 a year if the House fails to pass the tax cut extension by the end of the year.

The White House also says about two million out-of-work Americans will lose their unemployment insurance if the House does not act.