MINNEAPOLIS (WCCO) — The odds of your paycheck getting smaller next year just a got a lot greater. Tuesday in Washington, the House of Representatives rejected a bi-partisan Senate bill that would have extended the popular tax break for two months.
Conservative Republicans denounced the Senate deal saying they wanted a deal that would put in place a tax break for the whole year.
The impasse means 160 million Americans will see a tax increase, while about 2.2 million long-term unemployed Americans will see their benefits disappear.
Republicans insist a compromise is still possible, but Democrats say it’s too late.
Unless a last-minute deal can be reached, 160 million Americans will face a tax hike on Jan. 1 or an average of $20 less in their paycheck each week.
The votes from the Minnesota delegation were along party lines with Rep. Michele Bachmann not voting because she was campaigning for the presidency in Iowa. Republicans say they voted against the deal because they wanted a yearlong extension of the tax cut and not just one for two months.
Rep. John Kline criticized Senate Republicans for compromising with Democrats.
“They are in the Senate, you know, how frankly dysfunctional the Senate is,” Kline said.
But Democrats were quick to accuse the Tea Party of hijacking more moderate Republicans. And many criticized House Speaker John Boehner.
“Speaking about dysfunctional, he has lost control of his own body. He has lost control of his own membership, this was something Speaker Boehner signed off on,” Sen. Al Franken said.
The collapse of the compromise, which just a few days ago looked like a done deal, has some analysts saying Republicans will have some explaining to do. Prof. Larry Jacobs is with the Humphrey Institute.
“Congress has really done it this time. They are messing with the bread and butter of Americans who are already struggling, who are going to see their unemployment checks stopped, who are going to see their taxes go up and I think it’s going to rebound to hurt Republicans, who are really struggling,” Jacobs said.
And its not just the payroll tax cut that won’t happen. The extension of long-term unemployment benefits is a no-go and right now, a 27 percent reduction in Medicare payments to doctors will go into place in mid-January.
Republicans say there is still time for a compromise — Democrats are not that optimistic.