House GOP rallies around new payroll tax cut bill

Speaker of the House John Boehner, R-Ohio, returns to his office after emergency legislation to avert a government default and cut federal spending passed a showdown vote in the House of Representatives, at the Capitol, in Washington, Monday, Aug. 1, 2011. (AP Photo/J. Scott Applewhite) J. Scott Applewhite

John Boehner
AP Photo/ J. Scott Applewhite

House Republicans on Thursday rallied around a new proposal to extend the payroll tax cut, extend unemployment insurance and prevent doctors who treat Medicare patients from seeing a massive pay cut next year.

The mood was in stark contrast to a meeting last week when numerous Republican congressmen said they could not support the package.

"I think our members received the discussion very well," House Speaker John Boehner told reporters after the meeting. "I feel confident about our ability to move ahead.

When asked what changed everyone's mind, Rep. Pete King, R-N.Y., joked that the "Christmas spirit" overcame members.

But leadership aides said that members were assured that the package would be properly paid for so it would not impact the Social Security Trust Fund, and that the bill includes significant reforms to programs like unemployment insurance. They also said that members were happy with extra provisions that would force President Obama to move on a controversial oil pipeline.

The latest proposal would continue the payroll tax cut for one year at the current level of 4.2 percent, despite Democrats in the Senate wanting to expand the tax break to 3.1 percent.

Obama group steps up fight over payroll taxes
Obama rejects efforts to tie tax cut extension to Keystone pipeline

It would also extend unemployment benefits, but only with reforms. The maximum number of weeks a person could claim the benefit is currently 99. The GOP proposal would trim that to 79 weeks in January and 59 weeks by the middle of next year. The reforms would also lift a federal rule that bans states from requiring drug screening for people on unemployment benefits. And they would give states more flexibility to require education and training for beneficiaries.

The package would also include legislation sponsored by Rep. Lee Terry, R-Neb., that would strip Mr. Obama of the authority to approve or disapprove of the construction of the controversial Keystone Pipeline from Canada to Texas. The bill would move the authority to approve the permit from the State Department to the Federal Energy Regulatory Commission and require the permit to be issued within 30 days of receiving the application.

Mr. Obama threatened Wednesday to veto the legislation if Republicans added provisions like the pipeline measure, unrelated to the payroll tax cut, in order to get members to support the payroll tax extension.

"Any effort to try to tie Keystone to the payroll tax cut, I will reject. So everybody should be on notice," the president said. He said "the reason is because the payroll tax cut is something that House Republicans as well as Senate Republicans should want to do regardless of any other issues.

While Mr. Obama argued Republicans should be for the tax cut because now is not the time to raise taxes on middle class Americans, Republicans said the president is blocking jobs.

"I don't understand why the president wants unemployment extended, but he won't support a bill that creates American jobs," Rep. Terry said in a statement.

The package is expected on the House floor early next week, but differences will still have to be worked out with the Democratic Senate and Obama Administration if the payroll tax cut will continue for 160 million Americans past this year.

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    Jill Jackson is a CBS News senior political producer.

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