House Passes Payroll Tax Cut Extension With Strings Attached to Oil Pipeline

The House of Representatives has decided to extend the payroll tax cuts, but a clause in the plan could force the White House to veto the bill. The bill, which was passed with a 234-193 vote (224 Republicans and 10 Democrats) would extend tax benefits to nearly 160 million American workers but it would also speed up the process for government approval of the Keystone XL Pipeline.

Last week, President Obama warned Republicans and House Speaker John Boehner not to include the Keystone XL Pipeline into the payroll tax cut bill. Obama said:

“Any effort to try to tie Keystone to the payroll tax cut, I will reject… My warning is not just specific to Keystone. Efforts to tie a whole bunch of other issues to what’s something that they should be doing anyway will be rejected by me.”

According to the LA Times, the bill will now head to the Senate where it will likely be rejected. Senate Majority Leader Harry Reid said:

“This is what I told (John Boehner): we are not going to finish the work of our country this year unless we work together. They are wasting time catering to the ‘tea party’ when they should be working with Democrats on a bipartisan package that can pass both houses.”

Boehner and the majority of the Republicans in the house feel that by including the Keystone XL Pipeline they are able to kill two birds with one stone. The payroll tax cut will extend benefits to millions of taxpayers while at the same time offer the opportunity for more jobs. Senate Minority Leader Mitch McConnell said that this is “the biggest shovel-ready project in America” and that Democrats shouldn’t let politics get in the way of this beneficial bill.

McConnell said:

“Here’s a project that would create tens of thousands of jobs right away, wouldn’t cost the taxpayers a dime to build, would reduce the share of energy that we import from unfriendly countries overseas, and which everybody from the labor unions to the U.S. Chamber of Commerce says they support because it would create tens of thousands of jobs right away.”

The White House, on the other hand, believes that Republicans are trying to score political points against the president as they are daring him to veto a bill that would extend the payroll tax cuts.

The White House released a statement saying:

“This is not a time for Washington Republicans to score political points against the President. It’s not a time to refight old ideological battles.”

CNN reports that Democrats may also reject the bill because of how it deals with unemployment benefits. The House measure would extend the payroll tax for another year and will renew aid for the unemployed. The bill would also, however, cut the maximum amount of time to receive jobless benefits from 99 weeks to 59 weeks.

What do you think of the House’s payroll tax cut plan? Should the Democrats cave and pass the bill? Will millions of Americans have higher taxes next year because of politics?