House approves payroll-tax cut extension : Report

WASHINGTON (MarketWatch)
House lawmakers voted 234 to 193 on Tuesday to approve a payroll tax-cut package that also includes an oil-pipeline provision opposed by the White House, leaving an extension of the tax cut up in the air with about two weeks remaining until it expires.
The White House says that President Barack Obama will veto the bill, which would require permitting of the Keystone XL pipeline within two months.
“This bill is about jobs, jobs, jobs — creating jobs and helping Americans find a job,” said Rep. Dave Camp, a Michigan Republican who chairs the House’s tax-writing Ways and Means Committee.
The Republican bill, which now goes to the Senate, also would extend unemployment benefits and prevent cuts in Medicare payments to doctors. It would keep the Social Security payroll tax at a lowered rate of 4.2%. That rate is set to go up to 6.2% on Jan. 1 if Congress doesn’t act.
The inclusion of a provision to speed up approval for the Keystone XL pipeline between Canada and the U.S. Gulf Coast makes the bill a nonstarter in the Senate. House Democrats slammed it during a floor debate.
“There’s no question that we must extend the payroll-tax breaks,” said Rep. Henry Waxman of California. “But the price that the Republicans are imposing through this legislation is simply unacceptable.”
Obama’s administration has delayed a final decision on the pipeline project until 2013.
Senate Democratic Leader Harry Reid of Nevada said Tuesday that Republicans were adding “ideological candy” to the debate over how to move forward on a payroll tax-cut extension.
Both parties want to keep the payroll tax from going up to 6.2% on Jan. 1 from its current reduced rate. But so far there’s been no agreement on how to pay for extending the break. Senate Democrats have sought to slap a surtax on incomes of $1 million and above to pay for it, a move Republicans have rejected.
“If Sen. Reid wants to hold up the jobs bill, then he will go on Santa’s naughty list. It is Christmas; it is not Halloween,” said Rep. Jeb Hensarling of Texas, a member of the Republican leadership, on Tuesday morning.
House Democrats offered an alternative bill during Tuesday’s debate that would have paid for the payroll tax with a millionaire surtax, but it failed.
The House’s passage of the Republican bill puts pressure on the Senate to take the next step. Reid said Tuesday that he could agree to simply not pay for the tax cut and add the cost to the deficit instead, according to reports