President Obama ended a contentious, rollicking legislative year on a note of minor triumph over his Republican critics in the House on Friday as two branches of government came together to preserve federal tax relief for more than 160 million Americans.
In the process, the contretemps added some end-of-year glitter to the president's political standing, according to recent polls, and eroded the clout of House Speaker John Boehner within his caucus.
With the new law in hand, the president turned his attention to the tough election year ahead. “We have a lot more work to do,” he said in the White House briefing room. “We’re going to have to roll up our sleeves together -- Democrats and Republicans -- to make sure that the economy is growing, and to make sure that more jobs are created.”
Obama immediately returned to the populist, middle-class themes that will drive his January State of the Union address and his bid for re-election.
“We’ve got to make sure we’re rebuilding an economy where if you work hard, that work will be rewarded,” the president said, “the kind of economy where everyone is doing their fair share and everybody plays by the same set of rules, everybody has a fair chance and everybody is acting responsibly, including those of us here in Washington.”
The end-of-year gifts lawmakers wrapped up Friday included an eight-week extension of current payroll tax relief; continued unemployment insurance for the same period; and no reduction in federal reimbursement to doctors who treat Medicare patients. The last-minute collaboration in Congress was designed to give all sides more time to hammer out a longer-term payroll relief deal through the end of 2012. But it was also a face-saving off-ramp for Republican lawmakers who found themselves caught in a deep political rut.
Because the House earlier this week rejected a bipartisan bill approved, 89-10, in the Senate and insisted on House-Senate negotiations in favor of its own one-year extension, a tax hike loomed if Congress failed to act before Jan. 1. Under intense criticism that House Republicans were harming the GOP brand on the issue of tax relief, Boehner abruptly switched gears Thursday and agreed that the House would unanimously adopt the Senate measure it had rebuked just days before.
That about-face made it possible for the House and Senate to adopt the eight-week stopgap measure by swiftly gaveling into law unanimous consent agreements in two chambers nearly empty of elected members. Their actions, which did not require roll-call votes, temporarily muted the sharp political debates that will roar back to life when the election calendar picks up speed in January.
Obama lost no time signing the payroll compromise legislation in the Oval Office before departing Washington for Hawaii, where his family awaited his arrival for Christmas. He also signed into law omnibus spending and disaster-relief appropriations bills, and four other measures.
In his remarks, Obama thanked Congress and the tens of thousands of Americans who urged lawmakers and the White House in emails and other messages to reach an agreement favorable to Americans who continue to struggle in a weak economy. The president, who spoke in front of reporters but would not answer questions, called the payroll tax accord “critical,” and said uninterrupted unemployment insurance is “vital” for Americans still searching for work.
Senate Majority Leader Harry Reid appointed conferees Friday to work with House members in January on a deal to get longer-term payroll tax relief, which was the goal Obama set in September as part of his American Jobs Act. Reid said Sens. Max Baucus of Montana, chairman of the Senate Finance Committee; Ben Cardin of Maryland; Bob Casey of Pennsylvania; and Jack Reed of Rhode Island would serve as conferees with the House. Boehner named eight members to the committee: Reps. Dave Camp and Fred Upton of Michigan; Greg Walden of Oregon; Tom Price of Georgia; Kevin Brady of Texas; Renee Ellmers of North Carolina; Nan Hayworth and Tom Reed of New York.
The Congressional Budget Office analyzed the legislation enacted Friday and determined the law’s eight weeks of lost revenues and increased spending would be offset over a decade, reducing the deficit by $2 billion. If Congress opts next year to extend the relief provisions through all of 2012, new budget offsets would be required. That’s where partisan disagreements among conferees will begin anew.
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