House Passes Extension of Cut to Payroll Taxes

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Published: December 13, 2011 - New York Times

WASHINGTON — Defying a veto threat from President Obama, the House on Tuesday passed a bill extending a cut in Social Security payroll taxes for 160 million Americans for another year. But the Democratic majority in the Senate vowed to reject the measure because of objections to other provisions, including one to speed construction of an oil pipeline from Canada to the Gulf Coast.

The 234-to-193 vote set the stage for negotiations between the House and the Senate likely to continue into the weekend.

The vote was a victory for Speaker John A. Boehner. House Democrats voted overwhelmingly against the bill, forcing Mr. Boehner to rely on Republicans, including many conservatives who had initially expressed doubts about the economic value of extending the payroll tax cut.

In general, the vote followed party lines. Ten Democrats voted for the bill, and 14 Republicans voted against it.

The payroll tax bill, portrayed by House Republican leaders as an engine of job creation, became entangled Tuesday with a separate omnibus spending bill to finance much of the government for the remainder of the current fiscal year.

Democrats threatened to delay action on the spending bill to ensure that Republicans would address their concerns about the Keystone XL pipeline and other provisions of the payroll tax measure.

The pileup of important legislation created a typical end-of-the-year muddle as lawmakers raced to finish work and leave town for the holidays.

Members of both parties said the payroll tax cut would put money in the pockets of consumers, increasing the demand for goods and services and shoring up a weak economy.

The bill would extend jobless benefits for some of the unemployed, while reducing the maximum number of weeks of benefits that a worker could receive.

It would also block certain air pollution rules for industrial boilers and incinerators; freeze the pay of many federal employees through 2013; increase Medicare premiums for affluent beneficiaries; prevent a deep cut in Medicare payments to doctors; and eliminate more than $20 billion of spending planned under Mr. Obama’s new health care law.

Representative David Dreier, Republican of California, said the bill deserved bipartisan support because the pipeline “will create 20,000 to 25,000 jobs immediately and reduce dependence on Middle Eastern oil while increasing cooperation with our close neighbor to the north, Canada.”

But Representative Jim McGovern, Democrat of Massachusetts, said the bill was “loaded up with goodies to mollify the extreme right wing that is in charge of this House.” And the No. 2 House Democrat, Representative Steny H. Hoyer of Maryland, urged members of his caucus to vote no.

“This is a partisan bill sticking a finger in the eye of those who disagree with the policies included, simply for the purpose of energizing a small political base in their party,” Mr. Hoyer said.

Republicans “included things that clearly are unacceptable to the president,” like the pipeline, Mr. Hoyer said. “They know this is not going to pass the Senate.”

Mr. Boehner and the Senate Republican leader, Mitch McConnell of Kentucky, said House and Senate negotiators had nearly reached agreement on the omnibus spending bill. But, they said, the Senate majority leader, Harry Reid, Democrat of Nevada, was holding it up.

“The Senate majority leader now says he’s willing to hold up a bipartisan bill to fund our troops, border security and other federal responsibilities, rather than let the president decide if this pipeline project should move forward,” Mr. McConnell said.

Senator Reid defended his tactics, saying: “I am very disappointed in what the speaker has done to his payroll tax proposal to get Tea Party votes. Speaker Boehner had to add ideological candy coating to his bill to get rebellious rank-and-file Republicans on board.”

Mr. Reid said House Republicans were “wasting time catering to the Tea Party when they should be working with Democrats on a bipartisan package.”

“Speaker Boehner can’t pass anything in the House without Democratic votes, because anything you pass with strictly Republican votes fails over here,” Mr. Reid said. “In the Senate, we can’t pass anything unless we get Republican votes. It’s a fact of life.”

Mr. Obama said last week that he would reject any effort to tie the oil pipeline to the payroll tax cut. In its veto threat on Tuesday, the White House complained that House Republicans were protecting tax breaks for the wealthy and injecting “ideological issues into what should be a simple debate about cutting taxes for the middle class.”

The House debate highlighted stark differences on jobless benefits. Republicans would reduce the maximum duration of benefits to 59 weeks, from the current 99. Representative Earl Blumenauer, Democrat of Oregon, said it was cruel to reduce the limit because, in many parts of the country, “the jobs aren’t there.”

But Representative Dave Camp, Republican of Michigan and chairman of the Ways and Means Committee, said 59 weeks reflected “the more normal level typically available following recessions.”

Mr. Camp hailed several other restrictions and requirements.

Under the bill, states could require drug testing of people who applied for jobless benefits. And most people receiving benefits would have to search for work and to pursue education credentials if they did not have high school diplomas.

The House Republican bills lists the oil pipeline and the rollback of environmental rules as “job creation incentives.”

But Representative Edward J. Markey, Democrat of Massachusetts, said the Republicans were giving gifts to “their planet-polluting patrons, Big Oil and Big Coal,” and he asserted: “G.O.P. used to stand for Grand Old Party. Now it stands for Gang of Polluters. Now it stands for Gas and Oil Party.”

Some labor unions and some Democratic lawmakers support the pipeline project.

“I support the pipeline, but I also respect the president’s views that he does not want to be pushed into a decision,” said Senator Mary L. Landrieu, Democrat of Louisiana. “So I haven’t made a final decision.”