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Posted at 11:59 AM ET, 12/08/2011

New House GOP payroll tax proposal ties extension to Keystone pipeline project


(Alex Brandon - AP)
House Republicans are gearing up for a fight with the White House over the payroll tax cut extension.

The chamber’s GOP leaders on Thursday unveiled a proposal that would couple the extension of the one-year payroll tax holiday with a host of other measures, including a provision aimed at speeding up work on the Keystone XL oil pipeline – one day after President Obama warned that he would veto any such move.

The proposal by House Republican puts the chamber and the White House squarely at odds with each other as the deadline for reaching agreement on extending the payroll tax cut, unemployment insurance and a number of other high-priority measures approaches.

House Speaker John Boehner (R-Ohio) told reporters after the meeting that speeding construction of the pipeline is a “no-brainer.” He said members of the caucus seemed enthusiastic about the package in part because money taken from the Social Security trust fund would be “fully offset” with spending cuts elsewhere. He did not, however, lay out details of the bill in full.

“The fact that the president doesn’t like it makes me like it even more,” Republican Study Committee Chairman Jim Jordan (Ohio) said of the GOP leadership proposal as he left Thursday morning’s closed-door meeting. Jordan was among several House Republicans who had earlier announced they would back a move to extend the expiring payroll tax cut.

Obama said Wednesday that he would reject “any effort to try to tie Keystone to the payroll tax cut” and argued that the tax holiday “is something House Republicans and Senate Republicans should want to do regardless of any other issues.”

“Efforts to tie a bunch of other issues to something they should do anyway will be rejected — by me,” he said.

Rep. Bill Flores (R-Texas) argued Thursday that should Obama choose to oppose the House GOP measure, “it will show to the American people that he’s just campaigning.”

“If the president wants to veto what he’s asked for – which is an extension of unemployment benefits and an extension of the Social Security insurance cut – he needs to go for it,” he said as he left Thursday’s meeting.

Full details of the GOP proposal were not immediately available Thursday morning. But the plan appeared to include an extension of unemployment benefits, although it would gradually scale them back from a maximum of 99 weeks to 79 weeks and 59 weeks.

Members who attended the meeting said that the proposal also included some provisions found in the Senate Republican plan including reductions in health care, unemployment and other benefits for the wealthy. They also said that it would include one provision allowing states to make certain benefits contingent on applicants passing a drug test and another that would require a child’s Social Security number to be submitted in order for parents to apply for the earned income tax credit.

According to lawmakers, the proposal does not include tax repatriation, a provision championed by some House GOP freshmen that would encourage companies to bring back to the U.S. profits earned abroad.

House Republican leaders bundled the payroll tax measure and unemployment extension with other provisions aimed at rounding up conservative support for a tax cut to which many of the GOP rank-and-file had previously voiced opposition.

The question now is whether those changes by GOP leaders will be enough to secure enough support for the measure to pass when it reaches the floor, likely next week.

Flores, a freshman who was among the GOP lawmakers expressing concern that extending the tax cut would threaten the solvency of the Social Security trust fund, said that he was pleased with the new proposal and believes that it will “have a great deal of support in our conference.”

“I’m very pleased that the conference leadership listened to its membership and that it put together a package that encompasses lots of the key issues on Americans’ minds today, as well as some of those things that need to be fixed at the same time,” he said.

Rep. Peter T. King (R-N.Y.) described a “lot of unity in the caucus.” Asked what had changed from a week ago, when House leaders encountered stiff resistance to a similar bill, King replied, “Christmas spirit.”

Conservative Rep. Phil Gingrey (R-Ga.) said House leaders opened the meeting with a lengthy recitation of Republican accomplishments since taking control of the House in January, particularly the chamber’s renewed focus on cutting spending. He said the pep talk helped renew members’ desire to support their leaders and helped bring around some wavering votes, including his own.

Gingrey, a physician, also said he was particularly encouraged by Boehner’s talks in the last week with members of the House’s doctors’ caucus about ensuring big Medicare cuts for rates paid to doctors don’t kick in for two years. He said the provision would be paid for with higher Medicare premiums for wealthy seniors and by diverting some funds intended to pay for preventative care provisions of the federal health care reform law.

“I think the members sat there and said, ‘You know, we really have done some things. We really have made some changes here,’” Gingrey said. “I think, as the conference went on, people started feeling better and better about where we are and what we’ve done and more supportive of leadership; appreciative of the fact that over the last week, from the last conference to today, clearly leadership was listening to individuals.”

Rep. Jeff Flake (R-Ariz.), one of the House’s most vocal opponents of extending the payroll tax cut, said he still plans to vote against the measure -- but he predicted that GOP leaders will muster the Republican votes they need to get the bill to the Senate. He said fellow Republicans were itching for a fight on construction of the Keystone pipeline and the president’s decision to come out against tying the issue together so forcefully Thursday likely brought some conservatives aboard.

“If the president thinks he’s going to use that as an issue, the president is sorely mistaken,” said Flake, who added there was “no doubt” that enthusiasm over the Keystone issue helped convince some.

“It was a good conversation, all the way around,” said Rep. Peter Roskam (R-Ill.), the House’s deputy whip, in charge of vote counting. Asked if the GOP would have the votes to get the bill passed, he said, “We’ll start whipping it today.”

By and  |  11:59 AM ET, 12/08/2011

 
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