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Politics

Washington Week: Will House GOP Buy Payroll-Tax Bill?

December 18, 2011 - 6:00pm

Will the House GOP accept the new Senate payroll-tax bill?

The Senate worked over the weekend in an effort to conclude the end-of-the-session business and put an end to the first session of the 112th Congress before Christmas. They were able to pass all of the must-pass pieces of legislation in time for most senators to catch their planes out of D.C. and begin their Christmas holiday vacations. The Senate leaders worked into Friday night in order to craft the compromise language that extended the 2 percent payroll-tax holiday provision until Feb. 29. This two-month extension of the expiring tax law was shorter than many in Congress wanted, but it circumvented the payroll-tax increase that was to go into effect beginning Jan. 1. The two-month payroll-tax bill included the following provisions:

  • Payroll-tax extension of 2 percent through Feb. 29, 2012.
  • Unemployment insurance extension through the end of February 2012.
  • Doctor fix (prevents for two months a scheduled 27.4 percent cut in payments to doctors who treat Medicare patients).
  • Extends the Temporary Assistance for Needy Families program.

The bill pays for itself by incorporating higher fees at Fannie Mae and Freddie Mac. The increase in the fees is designed to bring private capital back into the mortgage market and cut the markets dependence on government support. The bill also increases premium fees at the Federal Housing Administration to enhance solvency and ensure mortgage market parity between Fannie- and Freddie-guaranteed and FHA originated loans.

The bill also included the very controversial Keystone XL pipeline provision. This was inserted in the House-passed one-year payroll-tax bill. However, the new Keystone language requires the president to make a national interest determination and approve the pipeline permit within 60 days. If no action is taken within 60 days, the permit takes effect. This language also provides that if the president finds Keystone to be not in our national interest, Congress will address the issue again when it considers the next effort to extend unemployment insurance, the payroll-tax issue as well, and the doctor fix. The bill passed the Senate Saturday morning by a vote of 89-10.

The Senate also passed the Department of Defense authorization conference report by a vote of 86-13. Finally, the Senate was able to fund the federal government for the remaining nine months of the fiscal year by passing the omnibus appropriations conference report, HR 2055, by a vote of 67-32.

The two conference reports that the Senate passed had already been agreed to by the House. Therefore, after the Senate votes, the bills began to make their way down to the White House for the president's signature. However, the 2 percent payroll-tax holiday bill needs further House action since the compromise language only extended the provisions for two months, as opposed to the one-year extension passed by the House last week.

This means the House will come in on Monday to conduct a vote on agreeing to the new Senate language. The Speaker of the House, John Boehner, R-Ohio, is opposing the new two-month extension. Therefore, all eyes are now on the House of Representatives as they consider the final piece of legislation needed to be passed for them to begin enjoying their Christmas holiday.

House Majority Leader Eric Cantor, R-Va., also issued a statement Dec. 18, saying the two-month extension of the payroll-tax bill is unacceptable to the House GOP leadership.

Steny Hoyer, D-Md., said this about the GOP House opposition to the Senate-passed payroll-tax bill: "I urge Republican leaders to break their pattern of opposition and confrontation, and instead work with us to pass this bipartisan agreement."

Senate Majority Leader Harry Reid, D-Nev., said this about the apparent House GOP opposition: If Speaker Boehner refused to vote on the bipartisan compromise that passed the Senate with 89 votes, Republicans will be forcing a thousand-dollar tax increase on middle class families on Jan. 1st."

Stay tuned to see if the House Republican leaders actually vote to defeat the Senate compromise language or pass it, in order to revisit the issue in two months.

Elizabeth B. Letchworth is a retired, elected United States Senate secretary for the majority and minority. Currently she is a senior legislative adviser for Covington & Burling, LLC and is the founder of GradeGov.com

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