After a huge political showdown took shape on Tuesday, the House of Representatives were able to pass a payroll tax cut extension, but most say the bill will most likely not pass in the Senate due to strong opposition from Democratic leaders. Lawmakers are also responsible for passing a broad spending bill to avoid a government shutdown after Friday.
Senate Opposes Oil Pipeline Project within Payroll Tax Plan
Members of the Senate, as well as President Barack Obama, have voice their strong opposition to the payroll tax cut extension passed on a 234-193 vote in the House of Representatives on Tuesday. The plan extends the payroll tax cut for one year and renews aid for the unemployed. It also cuts back the maximum length of jobless benefits from the current 99 weeks to 59.
While all lawmakers agree that a payroll tax cut is necessary to ensure that Americans are able to receive vital tax breaks averaging $1,000 in 2012, the Senate majority are dead set against passing an additional portion of the House’s bill that speeds the process for government approval of the Keystone XL oil pipeline.
Republicans have argued that incorporating the oil pipeline project into the bill helps Congress accomplish its goal of extending the payroll tax cut and providing job opportunities for working-class Americans. However, Democrats say that now is not the time to push for the project that would bring oil from Canada’s oil sands from northern Alberta, Canada to Texas.
The project is currently in limbo as the State Department considers objections from environmentalists and was supposed to be an issue held off until 2013 after the presidential elections. Democrats are arguing that Republicans are pushing to make it an issue now to appease conservatives in their caucus.
Spending Bill to Be Determined after Friday
While lawmakers are working on passing some version of a payroll tax cut extension before Friday to avoid missing out on the holiday recess, they are also responsible with coming up with a spending plan to keep the government funded and avoid shutdown that would occur after Friday.
Lawmakers hoped that a spending plan could be incorporated in the payroll tax cut extension, but this is not likely to work out as planned.
Senate Democrats said they had already started working on a new payroll tax cut extension, the details of which are sketchy. At the same time, some say negotiators have worked out a year-end spending bill that wraps nine remaining bills into one package.
The House is expected to vote on the spending bill by Thursday at the earliest with the expectation of its passage no later than Friday.
