House Republican leaders on Friday formally unveiled legislation that would couple an extension of several high-priority items, including the payroll tax holiday and unemployment benefits, with provisions aimed at rounding up conservative support, such as a measure to speed up work on the Keystone XL oil pipeline.
The package, which GOP leaders previewed to members of their conference Thursday, will likely be up for a vote on the floor early next week, aides said. If it passes the House, the measure will set up a showdown between House Republicans and Senate Democrats as well as the White House, which has pledged to reject any measure tying the payroll tax holiday to the pipeline project.
Senate Majority Leader Harry Reid (D-Nev.) on Friday immediately shot down the GOP proposal, which he argued stands little chance of passing the Democratic-controlled Senate.
“With the middle class facing a huge tax increase on the first of January, now is not the time to be debating unrelated measures like an oil pipeline,” Reid said in a statement. “If the House sends us their bill with Keystone in it, they are just wasting valuable time because it will not pass the Senate.”
At a Capitol news conference, House Minority Leader Nancy Pelosi (D-Calif.) warned that congressional Democrats would reject the latest GOP offering as an effort to “hold hostage” the payroll benefit for middle-class workers.
In particular, Pelosi singled out spending offsets that included cuts to Medicare and other mandatory spending programs as savings that would only be considered as part of a “big, bold and balanced plan” for trimming the federal debt, in the range of the attempted deal that President Obama and House Speaker John Boehner (R-Ohio) failed to cinch over the summer.
Now, those proposals should not be considered as part of a small, temporary stimulus program, she said, but the biggest immediate obstacle was the Keystone provision.
“It’s a poison pill designed to sink the payroll tax” holiday, she said.
Senate Minority Leader Mitch McConnell (R-Ky.) said in a statement that “unlike the previous proposals from Senate Democrats, this bill was designed to pass by leaving out job-killing tax hikes that have consistently faced bipartisan opposition, while using bipartisan proposals to reduce spending.”
The unveiling of the House Republican proposal comes one day after the Senate for the second time this month rejected two competing offers on the payroll tax, which will revert to 6.2 percent next month if Congress does not vote to extend the two-percentage-point cut that has been in effect for the past year.
According to a detailed summary posted on Boehner’s Web site, the House Republican plan is a broad package that includes a one-year extension of the payroll tax cut; an extension of unemployment insurance; and a two-year extension of the “doc fix,” which prevents cuts in reimbursements to doctors who see Medicare patients.
All of those are items that leaders of both parties as well as the White House have said that Congress must pass before it adjourns later this month. Where the parties differ is on how to pay for the cost of those items.
Some lawmakers of both parties have expressed concern that extending the payroll tax cut would threaten the solvency of Social Security; GOP leaders say their plan would address those concerns by cutting spending elsewhere in the federal budget and directing those savings to the Social Security Trust Fund.
Unlike Senate Democrats’ plan, the House Republican proposal would reform the unemployment insurance program to gradually reduce the maximum number of weeks of jobless benefits from 99 to 59, with a drop to 79 weeks next year.
The GOP proposal also would require those receiving jobless benefits to enroll in a GED program if they have not completed high school, and would allow states to choose whether to make drug testing a requirement for applicants.
On the Keystone pipeline, the Republican proposal would require the Obama administration to make a decision within 60 days on whether to grant a permit. The plan also would include provisions authorizing the government to conduct spectrum auctions and requiring the Environmental Protection Agency to delay regulations governing industrial boiler emissions, a move that House Republicans argue would lead to job creation.
Several elements of Senate Republicans’ payroll tax plan are included in the House GOP proposal, including an extension of the current two-year federal worker pay freeze as well as provisions on means-testing Medicare benefits and eliminating unemployment and food-stamp benefits for the wealthy.
One part of the plan that has already come under fire from Democrats is a provision that would make tens of billions of dollars in cuts in funding of the national health-care law, including an $8 billion repeal of the “prevention and public health fund” that was passed by the House earlier this year.
Staff reporter Paul Kane contributed to this post.