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House GOP Claims Support For Payroll Tax Cut Compromise

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Republicans claimed enough support to push legislation through the House on Tuesday that would continue a payroll tax cut for 160 million workers, a vote that would shift the battleground to a staunchly opposed Senate.

House GOP lawmakers emerged from a closed-door meeting Tuesday morning expressing confidence and daring President Barack Obama and the Democratic-led Senate to oppose them at a time when the economy remains on its knees. The roughly $180 billion bill would also extend unemployment benefits and prevent deep cuts in Medicare payments to doctors.

"You can't be for the middle class" and oppose the tax cuts and job creation the bill contains, said House Majority Leader Eric Cantor, R-Va.

"Mr. President, we can't wait," Cantor said. "That's why we are putting forward this bill to make sure that we are there for the middle class of this country."

The House GOP bill has virtually no chance of prevailing in the Senate, in part because it includes language forcing work on the proposed Keystone XL oil pipeline from Canada that Obama wants to delay until after next year's elections. Democrats want to extend the payroll tax cut and unemployment benefits and block the cut for doctors, but say the Republican package asks too much of low- and middle-income earners and not enough of the wealthy.

The White House says President Obama would veto a Republican bill.

Senate Majority Leader Harry Reid, D-Nev., accused Republicans of adding "ideological candy" to the legislation, a reference to the oil pipeline, and catering to tea party conservatives. Obama has promised to reject any bill containing the Keystone language, which would give the administration 60 days to approve a permit for work to begin.

Obama said last month that work on the 1,700-mile pipeline, slated to run from Alberta, Canada, to Texas, needed to wait for studies on how to avoid damaging environmentally sensitive lands in Nebraska. The postponement would allow the White House to sidestep a pre-election dispute that has pitted business and labor unions against environmentalists.

Some conservatives remain unhappy that the House bill is too costly, but others said those concerns were outweighed by their support for the pipeline language and changes the bill would make in the unemployment program.

"On the whole, there's a lot more ice cream than there is dirt" in the bill, said Rep. Trent Franks, R-Ariz.

Democrats complain that the bill does not do enough for unemployed people coping with one of the worst U.S. economies in decades. The bill prevents extra benefits for the long-term unemployed from expiring on Jan. 1, but would gradually wind down maximum coverage to 59 weeks, well below the current 99-week ceiling.

"This is one of the most punishing bills I've ever seen," said Rep. Louise Slaughter, D-N.Y. "We're basically saying to people who are unemployed, `How dare you lose your job."'

The measure would make other changes in the unemployment program, including giving states the right to administer drug tests to applicants for benefits.

The bill would retain this year's 4.2 percent Social Security payroll tax rate paid by workers in 2012, preventing it from popping back up to its normal 6.2 percent on Jan. 1 if Congress doesn't act. Obama got Congress to reduce the tax a year ago in an effort to leave more money in peoples' wallets and prod the limp economy, and GOP leaders pushing to renew the tax break next year have had to overcome objections from some Republicans who say it has done little to revive the economy.

The legislation would also prevent an automatic 27 percent cut in Medicare reimbursements for doctors in January, a reduction that could force some to stop treating Medicare patients. Instead, their reimbursements would rise by 1 percent each of the next two years.

The measure includes a range of other provisions, including language blocking a proposed Environmental Protection Agency rule curbing industrial pollution; preventing illegal immigrants and others who lack Social Security numbers from collecting the children's tax credit; and stopping welfare recipients from using their electronic benefit cards to pay at casinos and strip clubs.

Republicans would largely finance their bill by extending the pay freeze on federal workers for another year through 2013, and forcing them to contribute more to their retirement plans; raising the fees the government-run Fannie Mae and Freddie Mac charge lenders to back their mortgages; gradually charging higher-income seniors more for their Medicare premiums; and selling portions of the broadcast spectrum.

Obama and congressional Democrats proposed a deeper payroll tax cut for workers next year and sought to trim the payroll levies that employers pay as well. In another major difference with Republicans, they would pay for their legislation by raising taxes on people earning over $1 million a year.