House Passed Bill for Payroll Tax Cut Extension

The U.S. House of Representatives passed a bill extending a cut in Social Security payroll taxes.   

House Republicans are saying the payroll tax cut would put money back into the pockets of consumers, which would increase the demand for goods and services and be helpful to companies during a weak economy. The bill would extend jobless benefits for some of the unemployed, but would also reduce the maximum number of weeks of benefits that a worker could receive.

The bill would also require drug testing of people who applied for jobless benefits. Also, most people receiving benefits would have to search for work and pursue education credentials if they did not have high school diplomas.

According to reports, the bill was framed by House Republicans as promoting job creation, then became entangled with a separate spending bill to finance the majority of the government for the rest of the current fiscal year. Because of this, Democrats threatened to delay action on the bill to ensure that Republicans would address their concerns about the Keystone XL pipeline (a controversial oil pipeline extending from Canada to the Gulf Coast) and other provisions of the tax measure.

Representative David Dreier (R-California) said the bill will create 20,000 to 25,000 jobs immediately and reduce dependence on Middle Eastern oil while increasing cooperation with Canada. The House bill lists the oil pipeline and the rollback of environmental rules as “job creation incentives.”

News reports state that after the vote, Senate majority leader, Harry Reid (D-Nevada), declared on the Senate floor, “The bill passed by the House Republicans tonight is a pointless partisan exercise. The bill is dead on arrival in the Senate. It was dead before it got to the Senate.”

Last week, President Obama said he would reject any effort to tie the oil pipeline to the payroll tax cut.

Other provisions of the bill include: blockage of certain air pollution rules for industrial boilers and incinerators; freeze of pay for many federal employees through 2013; increase in Medicare premiums for affluent beneficiaries; prevention of a deep cut in Medicare payments to doctors; and eliminaiton of more than $20 billion of spending planned under President Obama’s new healthcare law.

A similar bill was first introduced by Senator Bernie Sanders (D-Vermont) in September (see “Senator Introduces Bill to Strengthen Social Security“).