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House GOP Unveils Payroll Tax Plan



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As promised, House Republicans have introduced their own proposal to extend the payroll tax cut and unemployment insurance for one year. Dubbed the Middle Class Tax Relief and Job Creation Act, the bill is fully paid for with spending cuts and other savings measures, such as:

  • Extending the current pay freeze for federal workers through 2013 ($26 billion).
  • Phasing in means testing of Medicare premiums for wealthy seniors ($31 billion).
  • Preventing millionaires from receiving unemployment insurance and food stamp benefits ($20 million).
  • Prohibiting IRS payments to illegal immigrants ($9.4 billion).
  • Repealing mandatory funding for the “prevention and public health fund” in Obamacare ($8 billion).

The proposal also provides funding for a two-year “doc fix” to prevent significant scheduled reimbursement cuts for Medicare physicians, and contains a number of additional job creation and welfare reform measures, for example:

  • Reforming unemployment insurance, using a two-step process to gradually reduce the maximum time of benefits eligibility from 99 to 59 weeks. Requiring recipients to be actively searching for work, enrolled in a GED program, or participate in a reemployment program as a condition for eligibility.
  • Accelerating a decision on the Keystone XL oil pipeline, requiring a permit to be granted within 60 days unless “the president determines the project is not in the national interest.”
  • Extending 100 percent business expensing through 2012 to encourage investment.
  • Extending and reforms the Temporary Assistance for Needy Families (TANF) program, set to expire at the end of the year. Closes the so-called “”strip club loophole” so blocking access for welfare electronic benefit transfer (EBT) cards in strip clubs, liquor stores and casinos.

The House will pass the legislation early next week, putting pressure on the Senate, which has repeatedly failed to pass its own version of the payroll tax extension, to act. It is also a direct challenge to President Obama, who has threatened to “reject” any measure to extend the payroll tax cut that includes “extraneous” provisions, namely the one relating to the Keystone XL pipeline.

“If the President is serious about his commitment to get the economy going and help small businesses create jobs in this country, he’ll work with us and sign this bill,” said House Majority Leader Eric Cantor (R., Va.).

UPDATE: Cantor’s office points out that many (more than 90 percent) of the “pay-for” measures in the House bill are drawn directly from President Obama’s September 2011 “jobs” proposal.



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