House passes GOP payroll tax package amid White House veto threat

Posted at 06:53 PM ET, 12/13/2011

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(Joshua Roberts – BLOOMBERG)

The House on Tuesday passed a bill combining an extension of the payroll tax cut with several GOP-favored provisions, including language to speed a decision on the Keystone XL oil sands pipeline, setting up a showdown with the White House, which has threatened to veto the measure.

The measure passed late Tuesday on a 234-to-193 vote. Ten Democrats joined 224 Republicans in backing the measure, while 14 Republicans and 179 Democrats voted “no.”

All eyes are now on the Senate, which has twice this month shot down competing payroll tax measures offered by Democrats and Republicans. Senate Majority Leader Harry Reid (D-Nev.) reiterated Tuesday afternoon that the House GOP plan is “not going to pass over here” and said that he is “hopeful” leaders will huddle together to craft a compromise on paying for the extension and other measures.

“The only way you’re going to get something done over there is get some Democratic votes,” Reid said. “The only way I can get anything done over here is get some Republican votes. That seems to scream for compromise, and I believe that’s what we need to do.”

The House Republican plan would extend for one year the reduction from 6.2 percent to 4.2 percent in payroll taxes for employees; it also would renew the “doc fix,” which prevents cuts in reimbursements to doctors who see Medicare patients, and would extend unemployment insurance, while gradually reducing the maximum length of time for benefits from 99 to 59 weeks.

If Congress doesn’t act to extend them, the payroll tax cut, doc fix and unemployment insurance are set to expire at the end of the year.

Amid opposition from some Republican rank-and-file members, however, GOP leaders crafted a package that would pair those extensions with some measures favored by conservatives, including speeding up a decision on the Keystone pipeline, authorizing the government to conduct spectrum auctions and delaying regulations governing industrial boiler emissions.

The GOP package also would require individuals who have not completed high school to enroll in a GED program in order to receive jobless benefits, and would give states the authority to make drug testing a requirement for applicants.

Republicans argued during Tuesday’s floor debate that the pipeline project would lead to the “immediate” creation of tens of thousands of jobs. Democrats have argued that that claim is inflated, and House Minority Whip Steny Hoyer (D-Md.) said earlier Tuesday that the Keystone pipeline provision “does have Democratic support, but not in this bill.”

“This is a partisan bill sticking the finger in the eye of those who disagree with the non-germane policies that are included, included simply for the purposes of energizing a small political base in their party,” Hoyer said at his weekly pen-and-pad briefing. “As I’ve said, the Republican Party now represents, in my view, the narrowest base of any party in the 45 years that I’ve been active in politics.”

The White House said in its veto threat that the GOP measure was a political move that “breaks the bipartisan agreement on spending cuts that was reached just a few months ago.”

Reid told reporters Tuesday afternoon that Senate Democrats discussed “a number of alternatives” to a surtax on millionaires, Democrats’ preferred method of paying for the payroll tax cut extension. He added that Democrats still back some way of requiring “shared sacrifice” from the wealthy.

“One of the things we certainly believe, as does almost 80 percent of the American people, (is) that there should be a contribution, ever be it so slight, by the wealthiest of the wealthy,” Reid said.

The payroll tax debate comes as Congress faces an even higher-stakes argument over keeping the government funded through late next year. The measure currently keeping the government running expires on Friday, and leaders of both parties have begun accusing each other of using the funding bill as a bargaining chip in the negotiations over the payroll tax.

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