House votes on payroll tax bill, sets up final compromise

By Karoun Demirjian

Tuesday, Dec. 13, 2011 | 9:31 p.m.

Disregarding the sure threat of a presidential veto, the House of Representatives passed their version of a payroll tax cut extension Tuesday, setting up the final stage of this season’s prime political showdown.

But before we get to that, let’s talk about what’s in this bill that Nevada Rep. Joe Heck calls “a pathway back to work” and Nevada Senator Harry Reid calls a “pointless partisan exercise.”

The extension of the payroll tax cut in the House Republicans’ plan — which passed by a vote of 234 to 193; 10 Democrats supported it, and 14 Republicans voted against it — is not an expansion like the Senate Democrats’ plan. Like Republican Sen. Dean Heller’s bill , it extends the current reduced payroll tax rate of 4.2 percent (regularly, it’s 6.2 percent) for one year.

It also includes a correction to the reimbursement rate offered to doctors who see Medicaid patients, a roll-back of air pollution rules for industrial boilers (to save jobs, Republicans say), and a directive to President Barack Obama to make a decision on Keystone XL, a Canada-to-Gulf Coast oil pipeline, in the next 60 days, or have it go ahead by default (to create jobs, Republicans say).

But the piece of the payroll tax package that’s likely to hit closest to home for Nevadans is a change — a reform, Republicans say — to unemployment insurance. The bill includes a phase-down of the program that would immediately slash 20 weeks of eligibility off the 99 weeks Nevadans and residents of other worst-off states are entitled to under federally-funded emergency benefits, and gradually pare back another 20 weeks by mid-2012.

To continue receiving unemployment benefits, jobless workers would also have to participate in job training courses and pass drug and alcohol screenings.

All told, Reid hates the idea.

“There are some reforms necessary. Not these,” Reid told reporters Tuesday, saying the House Republicans’ bill’s new proposals to restrict and scale back unemployment insurance were on “the wrong side of ridiculous.”

But Republicans say they’re not trying to judge anybody or put anyone out, just get the country back to normal and get people back to work.

“Simply continuing along the path that we’ve been on? I’m not — excited by that,” said Nevada Rep. Mark Amodei, who voted for the House bill Tuesday. “Because you know what, I don’t think things are getting better for working people.

“Do we want to cut benefits off for unemployed people now with no warning? No. But do we continue to fund the longest deal in history indefinitely?”

Amodei said of the proposed slashes to the term of unemployment eligibility, and of the drug and alcohol testing rules: “You know what, I think when you talk about employability, it’s part of the mix ... these move the ball down the field and make people more employable.”

So now almost everyone in the Nevada delegation has had a chance to cast a positive vote on their bill of choice — except Rep. Shelley Berkley, who did not vote for the House bill Tuesday.

“Congress should not give into Tea Party extremists who are telling us we can only stop a tax increase on the middle class if we punish those who have been thrown out of work by the recession,” Berkley said in a statement following the vote.

Still, that means it’s about time for compromise — and it was clear from lawmakers’ open speculations that they’re already eyeing potential trades.

“Interestingly enough ... the veto message omits the Keystone pipeline as one of the reasons the president is threatening to veto this bill,” Sen. Mitch McConnell, Republican Leader, said Tuesday. “We are in favor of extending the payroll tax holiday for another year ... but there should be a complete package ... we also have provisions to save jobs and create jobs.”

And Reid, as he said above, is not entirely opposed to the idea of unemployment reforms — nor to the idea of including other tax reforms in the package: he told reporters Tuesday he expected to see about $35 billion worth, though he declined to itemize them.

But he scoffed at the idea that the Obama administration’s silence on Keystone XL was in any way a tacit admission they’d be willing to deal on that subject.

“There was no need to mention Keystone pipeline,” Reid said, referencing a State Department announcement on Monday which indicated the federal government is looking at other routes for the pipeline. “They said it all yesterday.”

But the Obama administration isn’t opposed to the Keystone construction: it’s just delaying its decision until 2013 — after the election. Republicans hate the delay tactics.

“The time to do it is now,” McConnell said Tuesday.

But if delaying tactics that are rubbing people the wrong way, Reid was all set with a counter-punch Tuesday night.

Recalling how McConnell had suggest on Monday that “once this legislation comes over from the House, we pass it without delay,” Reid scurried to the floor to announce himself ready to vote — and publicly marvel at the lack of Republican zeal to do the same.

“Democrats were ready to vote tonight to prove that the bill was D.O.A., dead on arrival, but I spoke to the Minority Leader McConnell this evening and he told me he needs more time,” Reid said to the near-empty chamber. “I can only wonder what happened in the last eight hours.

“We already know this bill is dead,” Reid added, referring to the bill as “an exercise in futility.”

“We need to begin real negotiations on how to prevent a $1,000 tax hike,” he said.