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Republicans Unveil Payroll Tax Cut Proposal Set Up To Fail

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WASHINGTON -- House Republican leaders on Friday rolled out their plan for advancing the two most pressing issues before Congress -- extending the payroll tax cut and unemployment insurance -- but their bill is so loaded with "poison pills" that it seems little more than a politically driven exercise destined for failure.

Speaker John Boehner (R-Ohio) hailed the proposal, which is on tap for a House vote next week, as "a win for the American people and worthy of the President's signature." The bill would extend the payroll tax cut and unemployment insurance before both expire this year, and would pay for all of it through spending cuts versus the Democrat-preferred surtax on millionaires.

But Republicans attached a grab bag of items to the bill that ensure it won't win Democratic support, and instead sets up a scenario where Democrats are inclined to vote against a payroll tax cut, an issue they have been trying to champion.

Among other items, Republicans added language to the bill relating to the Keystone XL energy pipeline, a move that President Barack Obama has already said is a deal-breaker. Specifically, the bill would give the administration 60 days to resume work on the oil pipeline or require Obama to give a reason as to why the project is not in the national interest.

Obama stopped short of a veto threat when asked earlier this week about the possibility of Republicans linking the issues.

"Any effort to try to tie Keystone to the payroll tax cut I will reject, so everybody should be on notice," Obama said Wednesday. "I don't expect to have to veto it because I expect they're going to have enough sense over on Capitol Hill to do the people's business, and not try to load it up with a bunch of politics."

White House Press Secretary Jay Carney later wouldn't elaborate on whether "reject" means "veto."

"Reject means reject," he said during Friday's press briefing.

In addition to deliberately picking a fight with Obama on that front, Republicans stuffed a mix of other provisions into the bill unlikely to win Democratic support. Among them: denying unemployment insurance benefits to high school dropouts if they're not enrolled in a GED program, allowing states to drug test people who receive jobless benefits, and permanently slashing the maximum amount of unemployment benefits from 99 to 59 weeks.

The GOP plan also proposes paying for another priority issue -- the "doc fix," a provision to protect Medicare physicians from large reimbursement cuts set to take place next year -- by cutting $8 billion from the health care reform law. Other miscellaneous offsets include blocking welfare electronic benefit transfer cards from working in ATMs in strip clubs, liquor stores and casinos; extending the pay freeze for federal workers; eliminating government benefits for millionaires; and taking steps to ensure that undocumented immigrants don't collect checks from the IRS.

Boehner spokesman Brendan Buck said more than 90 percent of the savings in the bill are ideas that Obama has either proposed himself or are close variations. Proposals previously pushed by Obama include a Fannie Mae & Freddie Mac guarantee fee, which would save $35.7 billion, and federal employee retirement contributions, which would save $36.7 billion.

"The overwhelming share of offsets in the House bill come from things that the president himself has proposed or supported in the past," Buck said. "The White House is either misleading people or grossly misinformed. Either way, it's disturbing."

But Democratic leaders and the White House balked at what they saw as legislation designed purely for political theatrics.

"Their proposal doesn't have a shot," House Minority Leader Nancy Pelosi (D-Calif.) told reporters during a Friday press conference.

Republicans "put so many poison pills on it so it couldn't possibly survive," Pelosi said. "It's about the extremism of the Republicans in the House that remains the obstacle to this tax cut."

Senate Majority Leader Harry Reid (D-Nev.) reiterated that the GOP proposal has no chance in the Senate.

"If the House sends us their bill with Keystone in it, they are just wasting valuable time because it will not pass the Senate," Reid said in a statement.

The White House also signaled the bill is dead on arrival and pressed for action on the payroll tax cut itself.

Republican leaders are "choosing to re-fight old political battles over health care and introduce ideological issues into what should be a simple debate about cutting taxes for the middle class," Carney said. In addition to the Keystone language, the proposal to slash unemployment benefits in half is "objectionable."

A White House pool reporter managed to lob a question at Obama earlier Friday about Boehner's bill and whether it did anything to advance the debate.

Obama answered, "Merry Christmas," and kept walking.

Around the Web

House Republicans to offer payroll tax plan - CNN.com

Republicans link payroll tax cut to oil pipeline - MarketWatch

House GOP rallies around new payroll tax cut bill - Political Hotsheet ...

New GOP Payroll Plan Tied to Pipeline Measure - WSJ.com