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Senate Deadlocks Again on Payroll Tax Cut

In the futile game of dueling payroll tax holiday votes, the Senate engaged in another volley today that ended in failure for both Democratic and Republican proposals.

The Senate defeated the competing plans in the chamber’s last vote series of the week, voting to filibuster the same GOP offering voted down last week and a tweaked Democratic plan that shrunk the overall package, reduced the millionaires surtax and included fees proposed in last month’s failed super committee.

The Democratic proposal failed 50-48 and the GOP alternative was rejected 76-22. The biggest difference in today’s votes versus last week was that the GOP proposal picked up two new GOP supporters — Sens. John McCain (Ariz.), who was absent for the first vote, and Thad Cochran (Miss.), who switched his vote.

Meanwhile, House Republican negotiators continued to finish their catch-all legislation, which includes the payroll tax holiday extension and a variety of measures, from an overhaul of the unemployment insurance system to the approval of the controversial Keystone XL pipeline project.

President Barack Obama already has said he would reject any package that included the pipeline provisions, but Republicans have found a rare win on the issue in the midst of a battle pegged on jobs, the economy and the middle class.

“It’s another indication of where things are,” Senate Budget Chairman Kent Conrad (D-N.D.) said, walking into the votes. “It gives people a chance to try to determine how you close this gap.”

Currently, it appears “where things are” is at the point of now-habitual pre-recess stalemate.

Senate aides noted that while Republicans could successfully press on the Keystone measure and provisions to roll back boiler regulations, it would be difficult for GOP lawmakers to succeed in including significant unemployment insurance reform in the remaining days.

Last spring, the House Ways and Means Committee passed on party lines a bill that would grant further autonomy to the states in distributing funds, which might allow them to use the unemployment money to pay back other federal loans. The issue has been raised in the GOP end-of-the-year wish list.

After the two failed votes, Senate Majority Leader Harry Reid (D-Nev.) attacked Republicans in both chambers with a harshly worded statement.

“Senate Republicans rejected two proposals to give middle-class families a tax cut. And House Republican leaders had to entice their members into supporting their proposal by weighing it down with a laundry list of policies whose sole purpose are scoring points against President Obama,” Reid said.

Though the House GOP has yet to release a bill, Reid panned it, while also promising to continue to look for a bipartisan compromise.

“House Republicans’ bill is a partisan joke that has no chance of passing the Senate,” Reid continued. “Instead of playing political games, Congress should work to find common ground. In the days ahead, I intend to do exactly that.”

As the bickering continues, House Majority Leader Eric Cantor (R-Va.) warned Members today that they should prepare for a weekend session. He had already cautioned that the chamber may have to work next weekend.

And Obama, in a rare and brief question-and-answer session with reporters, threatened Christmas.

“I do not expect Congress to go home unless the payroll tax cut is extended and unless unemployment insurance is extended. It would be wrong for families, but it also would be wrong for the economy as a whole,” Obama said.

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