Republican House is source of sinking hearts

“Congress debates payroll tax cut, government funding omnibus

By Rosalind S. Helderman and Felicia Sonmez, Published: December 13

Prospects for a year-end congressional compromise on key tax and spending legislation grew more complicated Tuesday, as the Republican House passed a controversial version of a payroll tax cut extension despite a veto threat from the White House.

The increasingly contentious tax dispute threatens to derail what had been an emerging compromise on separate legislation to fund the government through next September, raising the specter of a possible government shutdown this weekend if the conflict is not resolved by Friday.

Approved on a vote of 234 to 193, the Republican tax bill would extend a one-year break in the payroll tax that is due to expire at the end of the month, setting the rate at 4.2 percent for the year instead of allowing it to revert to 6.2 percent. But it also would accelerate the construction of an oil pipeline from Canada to the Gulf Coast that the White House is determined to slow down.

The measure’s passage represented a victory for House Speaker John A. Boehner (R-Ohio), who was able to muscle it through the chamber largely on Republican votes, drawing support from conservatives wary of the tax cut by loading the bill with other GOP-
favored items.

To fund the tax cut, the measure would freeze pay for civilian federal workers for another year and reduce the government workforce.

It would extend benefits for the long-term unemployed but reform the unemployment insurance program to reduce the maximum time those out of work can receive benefits, from 99 weeks to 59 weeks. It also would allow states to require drug testing for benefits.

The measure would postpone scheduled cuts in Medicare re­imbursement rates for doctors but pay for the “doc fix” by raising Medicare premiums for upper-
income seniors and eliminating some funding for the federal health-care law.

Boehner said the House has acted on the tax issue, and he suggested that it is now up to the Senate to move as well or let the tax cut expire.

“The American people are asking, ‘Where are the jobs?’ ” Boehner said. “The House is listening, and we’ve passed a large bill that contains many of the priorities of our caucus and the White House,” he said.

Ten Democrats voted with Republicans to approve the measure in the House; 14 Republicans opposed it.

That is unlikely to happen. Senate Majority Leader Harry M. Reid (D-Nev.) called the bill a “pointless partisan exercise” and characterized it as an ideological grab bag of Republican pet projects.

President Obama has rejected linking the payroll tax issue to the approval of the 1,700-mile Keystone XL pipeline, and the State Department, which has is responsible for examining the environmental impact of the cross-border project, announced Monday that it would not be able to complete the proper reviews in 60 days, as required by the House bill.

But a formal veto threat from the White House on Tuesday did not mention the pipeline. Instead, it accused Republicans of cutting programs needed by middle-income workers to fund the tax reduction.

To pay for extending the cut, Democrats have pushed for a surtax on those making more than $1 million a year. Although the Senate has twice blocked bills that would fund the reduction with a millionaire tax, Reid said again Tuesday that the wealthy should be asked to fund the tax cut for middle-class workers. He also said Democrats would be willing to extend the tax cut without outlining a way to pay for it.”