Tax cut bill passes House, goes to Senate

Dec. 13, 2011 at 7:46 PM
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WASHINGTON, Dec. 13 (UPI) -- The U.S. House passed and sent to the Senate a GOP bill extending a payroll tax cut and jobless benefits but containing provisions Democrats call poison pills.

The vote Tuesday was 234-193 in favor of the $180 billion Middle Class Tax Relief and Job Creation Act, with 224 Republican members joined by 10 Democrats in voting for the bill. Fourteen Republicans voted against it, The Hill reported.

The bill links the tax-cut extension to a host of other measures -- including a provision that would speed up a decision by the Obama administration on the Keystone XL oil sands pipeline system to transport synthetic crude oil and diluted asphalt, tar and other road- and roof-surfacing materials to the Gulf Coast from Alberta, Canada -- a project the White House has sought to delay.

The Senate is not expected to approve the bill as passed in the House, The Hill said. President Barack Obama has already said he would veto it.

After the vote, White House press secretary Jay Carney issued a statement saying Congress "cannot go on vacation before agreeing to prevent a tax hike on 160 million Americans and extending unemployment insurance."

"That is simply inexcusable in this economy," Carney said.

"This is not a time for Washington Republicans to score political points against the president," he said.

Carney had asked Monday, "What happened to Republican support for tax cuts?"

"They're so passionate about it when it comes to defending extension of the Bush tax cuts for the wealthiest earners. ... But when it comes to most Americans who get a paycheck -- who need that extra 1,000 bucks, or 1,550 bucks next year to make ends meet -- they're like, 'Well, not so much, unless I get this,'" Carney said.

The House GOP plan -- which would keep the normal 6.2 percent Social Security payroll tax workers pay at 4.2 percent next year -- includes legislation already passed in the House to roll back Environmental Protection Agency rules limiting toxic air pollutants from commercial and industrial boilers, and ban the EPA from proposing a new standard in the near future.

In addition, it would cut the maximum unemployment coverage to 59 weeks from the current 99 weeks by mid-2012. And it would prevent a 27 percent cut in Medicare reimbursements to doctors next year -- instead, increasing their Medicare payments 1 percent each of the next two years.

The plan seeks to pay for the extended tax cut and added unemployment benefits by cutting back on social-program benefits, selling federal assets, freezing federal employees' pay through 2015 and cutting the number of federal workers by about 10 percent through attrition.

The Senate Democrats' bills, which Senate Republicans have rejected through use of the filibuster, would drop the payroll tax to 3.1 percent next year and provide employers with similar reductions. It would pay for the tax-cut extension with a 3.25 percent tax on gross income over $1 million for single filers and married couples filing jointly.

Reducing the employee's share of payroll taxes to 3.1 percent and extending the cut to employers would spur enough new consumer spending to add about 750,000 jobs, Moody's Analytics says. The Moody's forecast assumes the tax cut is offset by the proposed surtax on millionaires, beginning in 2013.

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