House GOP details bill renewing payroll tax cut

WASHINGTON - House Republicans offered up legislation on Friday renewing the Social Security payroll tax cut and extending but trimming unemployment benefits, but a showdown with President Obama was likely over a controversial oil pipeline.

The two parties generally agree on the bill's pillars: preventing the Jan. 1 expiration of payroll tax cuts and of extra coverage for the long-term unemployed, and avoiding a mandated cut in payments the government sends doctors for treating Medicare patients.

But the GOP tax cut and jobless benefits are less generous than Democrats want. And Republicans ignore the White House's preference to finance the bill by boosting taxes on millionaires, instead paying their bill's price tag - more than $180 billion - by extracting money from federal workers, boosting federal fees and requiring higher-earning seniors to pay more for Medicare.

While the measure's chief ingredients had been set earlier, the 369-page bill revealed new details. These included letting states administer drug tests to some unemployment benefit applicants; barring welfare recipients from using benefits at strip clubs, liquor stores, and casinos; and cracking down on illegal immigrants collecting federal checks for the children's tax credit by requiring them to produce Social Security numbers.

The GOP plan also staves off a threatened Medicare cut that would slash fees paid to doctors by 27 percent, which no one wants since it would destabilize health care for 47 million seniors and disabled people. The price would be paid by higher-earning seniors, who would pay higher monthly premiums for Medicare outpatient services and prescriptions starting in 2017.

Currently only about 7 percent of Medicare recipients pay higher premiums because of their income. Under the proposal, 25 percent would eventually pay higher monthly charges. That would affect not only the wealthy but also many who feel they are middle-class themselves.

Upper-income seniors have long paid higher Medicare premiums. But the GOP bill would increase those premiums for single retirees earning more than $80,000, rather than the current $85,000. The threshold for married couples would be $160,000 instead of the current $170,000.

Without action, the payroll tax paid by 160 million workers would return to its normal 6.2 percent on Jan. 1, up from 4.2 percent this year. That reduction, enacted in an effort to spur job creation, saved $1,000 this year for a family earning $50,000.

The GOP bill would keep the payroll tax at 4.2 percent through 2012. The Republican bill would also gradually reduce the maximum 99 weeks of unemployment coverage to 59 weeks by mid-2012. Without renewal, two million jobless people would lose benefits by February.

The biggest dispute, though, is over GOP language that would give Obama two months to issue a permit allowing work on the proposed Keystone XL pipeline that would run from Canada to Texas. That pipeline has been fought by environmental groups and states along the route but is favored by labor and business. Obama this week said he would reject the overall bill if it included pipeline language.