House Impasse Threatens Payroll Tax Cut

MIAMI (CBSMiami.com) – A high-stakes standoff in Congress could end up with thousands of Floridians losing money in their paycheck and hitting first-time home buyers in the area.

House Republicans are expected to vote down a Senate plan that passed with 89 votes in the 100 member chamber that would extend the payroll tax holiday for two months while negotiators work on a long-term extension for the rest of the year.

The House passed a full year plan, but loaded it with policy riders that Democrats in the Senate and White House were loathe to including. The GOP leadership in the House wanted to force the issue and make Senate Democrats pass their version.

Over the weekend, the Senate plan was agreed to by leaders from both sides.

But, Sunday, the more conservative wing of the House stood up and successfully lobbied House speaker John Boehner to oppose the Senate version and demand negotiations begin on the full-year version and not pass a short-term measure.

If the measure doesn't pass, a payroll tax cut passed by both Houses and championed by President Barack Obama will end and workers everywhere will see more money come out of their check each month.

Senate Majority Leader Harry Reid said that the Senate version was a bi-partisan deal agreed to by Senate Minority Leader Mitch McConnell. He also indicated that he had no reason to renegotiate the deal now.

But for the first time since the beginning of the year when disputes threatened a government shutdown, Senator Reid and President Obama appear to have the upper hand, due to the bipartisan support for the Senate measure passed last Friday.

If House Republicans vote down the deal, Democrats will immediately launch offensives against House Republicans saying they voted down a middle-class tax cut. Republicans will counter that Senate Democrats refused to vote for a long-term deal on the tax break.

Things could get further complicated for first-time home buyers as well.

According to the AP, a fee hike included in the Senate bill would force homeowners to pay an extra $204 a year if they applied for mortgages from the Federal Housing Administration.

The House is expected to vote down the Senate proposal after a caucus meeting around 6:15 p.m. Monday night.