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Boehner must sell payroll-tax cut deal

Yielding on offsets imperils GOP votes

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House Republican leaders spent Wednesday trying to finalize a payroll-tax cut deal with Democrats and also sell the agreement to reluctant members of their own party, hoping to avoid the embarrassment of losing a large chunk of their caucus in an eventual floor vote.

At the same time, House Speaker John A. Boehner and his leadership team, trying to contain another brewing rebellion over a massive transportation plan, said Wednesday they will delay a vote on most of that package until after next week's vacation.

Both issues are testing Mr. Boehner, who is trying to manage his conservative members' expectations while working on compromises with President Obama and Democrats, who control the Senate.

The pending payroll-tax holiday deal came a day after House GOP leaders dropped their longtime insistence that the tax cut be offset by spending cuts elsewhere in the budget, prompting several of their members to waver on whether or not they would support the deal.

"We worked really hard for offsets since December 2011, and now we've given those up," lamented Rep. Jack Kingston, a conservative Georgia Republican who said he is leaning against supporting the deal. "The prudent approach to taxes right now — especially those earned for specific entitlements like retirement — is that you really should offset them."

But Mr. Boehner, when asked why he gave in to the Democrats' demand that the tax cut not be paid for immediately, said it wasn't fair for taxpayers to play a game of political chicken.

"We're not going to allow the Democrats to continue to play political games and raise taxes on working Americans," the Ohio Republican said. "So we made a decision to bring them to the table so that the games would stop and we would get this work done."

The speaker said that barring a last-minute breakdown, he expected to bring the deal to the House floor for a vote later this week.

Rep. Sander M. Levin, a Michigan Democrat and one of 20 negotiators who have met for a month trying to work out a deal, told reporters that at least one significant issue on how to pay for the tax cut remains unsolved.

"We need to resolve outstanding issues but we need to do it in the right way," he said.

While Mr. Levin wouldn't elaborate, congressional leaders must resolve the issue of a proposed offset — a reduction in pension benefits for federal workers — that is included in both the payroll-tax cut and transportation bill proposals.

The overlap in part led Mr. Boehner to hold off voting this week on the entire transportation package — a $260 billion collection of bills that would fund federal highway, surface transit and transportation safety programs for five years.

The so-called "highway bill" leaves many House Republicans dissatisfied. Some say the proposal is an egregious example of government overspending while others say it cuts too much from sacred projects in their districts.

A slew of amendments has further bogged down the transportation package, which has been split up into several bills.

The current 2-percentage point Social Security tax cut, set to expire at the end of February, allows a worker earning $50,000 to keep about an extra $20 a week.

The payroll-tax funds Social Security. Lawmakers said they will take money from regular funds to replenish the Social Security trust fund, but with the government running a deficit, that means adding to the debt rather than shifting money around.

The deal's proposals to extend unemployment benefits and doctor payments under Medicare, however, would be offset by spending cuts.

Jobless workers currently have a maximum of 99 weeks of combined state and federal unemployment benefits. Under terms of the pending deal, that would gradually fall to 73 weeks in states with the worst unemployment, though a House GOP aide said most states would be capped at 63 weeks.

Democrats had pushed for a 93-week unemployment benefit cap, while Republicans wanted 59 weeks. Mr. Obama's 2013 budget released Monday seeks a 79-week cap.

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