House Passes Payroll Tax-Keystone Pipeline Bill, But Reid Says It’s Dead in Senate

By ALAN FRAM | December 14, 2011 | 2:55 AM EST


ASHINGTON (AP) - A Republican payroll tax cut bill that sailed through the House despite a White House veto threat is dead on arrival in the Senate, and it will soon be time for talks on a final package, the Senate's top Democrat says.

Senate Majority Leader Harry Reid, D-Nev., made the remarks Tuesday shortly after the House used a near-party line 234-193 vote to approve the measure. The bill has drawn nearly universal Democratic opposition because it would force work to begin on the 1,700-mile-long Keystone XL oil pipeline, which President Barack Obama would rather postpone, and would trim federal spending without forcing the wealthy to contribute as much as Democrats want.

The measure would keep 160 million workers from seeing their payroll tax jump on Jan. 1 from this year's 4.2 percent back to its normal level of 6.2 percent -- a $1,000 difference for a family making $50,000. It would also renew expiring extra benefits for long-term jobless people and head off a cut in doctors' Medicare reimbursements, a reduction that could prompt some to stop seeing elderly patients who use that program.

Reid says he will schedule a vote shortly on the House-passed bill to underscore its irrelevance -- a vote that should start the clock ticking on what stands as the year's final, high-stakes partisan faceoff.

"It was dead before it got to the Senate," Reid said of the House legislation. "The Senate will not pass it. The sooner we demonstrate that, the sooner we can begin serious discussions on how to keep taxes from going up on middle-class Americans."

House Speaker John Boehner, R-Ohio, taunted Senate Democrats after the House passed its legislation.

"The Senate can take up our bill, they can pass it, they can amend it, they can move their own bill," he told reporters, standing beside a video clock counting down the seconds until the payroll tax boost that would otherwise occur Jan. 1. "But it is time for the Senate to act. Democrats who run the United States Senate can't continue to hide and sit on the sidelines."

Boehner also said that when the Senate acts, "we'll begin to then take a look at where we can find common ground."

The payroll measure isn't the only one lawmakers plan to tackle before beginning their year-end vacation, presumably before Christmas.

Bipartisan lawmakers have reached agreement on a $1 trillion measure financing scores of government agencies through next September, a bill that would avert a federal shutdown this weekend when temporary funding expires.

Democrats, though, are refusing to let the legislation move through Congress until the two parties broker a deal on the payroll tax measure. Democrats hope that will build pressure on Republicans to quickly reach agreement on the payroll tax bill, a tactic Boehner called "outrageous."

The House planned to debate a $662 billion defense bill on Wednesday that charts policy for military personnel, weapons systems and the wars in Iraq and Afghanistan, plus national security programs in the Energy Department. House and Senate negotiators wrapped up the bill Monday night after including revisions that address administration concerns over handling of terrorism suspects.

The bill would require that the military take custody of a suspect deemed to be a member of al-Qaida or its affiliates who is involved in plotting or committing attacks on the United States, with an exemption for U.S. citizens. The legislation also would deny some suspected terrorists, even U.S. citizens seized within the nation's borders, the right to trial and subject them to indefinite detention.

Also Wednesday, the Senate was expected to reject proposals to amend the Constitution to require a balanced federal budget.

The Senate seems sure to fall short of the two-thirds majority required to amend the Constitution, a margin the House failed to muster several weeks ago as Republicans there failed to push a similar amendment to passage. The Senate will vote on dueling Republican and Democratic proposals.

Republicans say work on the Keystone oil pipeline, proposed to run from the tar sands of Alberta, Canada, to Texas oil refineries, would create 20,000 or more jobs. Opponents say the real figure is more like 3,500.

Obama cited a need for studies of how the pipeline could avoid harming fragile lands in Nebraska when he announced last month that work would be delayed until after next year's elections. The GOP bill would give the president 60 days to act or the needed work permit would be automatically granted.

Another provision that Republicans say would create jobs would derail a proposed federal environmental rule aimed at curbing some industrial pollution.

To cover the payroll tax bill's overall cost, which exceeds $180 billion, the measure ignores Democratic proposals to slap a surtax on people earning more than $1 million annually.

Instead, Republicans would raise the money by continuing a pay freeze on civilian federal workers and requiring them to contribute more to their pensions; making higher-earning seniors pay steeper premiums for Medicare; cutting funds from Obama's 2010 health care overhaul; raising some federal fees; and selling portions of the broadcast spectrum.

The Senate version of the payroll tax legislation may also renew some tax provisions that would otherwise expire Jan. 1, including one providing tax breaks to mass transit commuters.


Associated Press writers Andrew Taylor, David Espo, Donna Cassata and Jim Abrams contributed to this report.