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Division Over Payroll Tax Widens

Tom Williams/CQ Roll Call
Senate Majority Leader Harry Reid told reporters he wants the payroll tax cut conference committee to include extenders for more than 80 tax provisions that expired at the beginning of the new year.

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Reid said earlier in the day that he doesn’t think the final deal should include a Keystone XL provision. He acknowledged that some Democrats, including Baucus, support the project. He added that he has not told Democrats to exclude the provision from the final package.

Baucus “is certainly a free agent,” Reid said. “There are a number of states [that favor the project]. In fact, both Senators from Montana approve of that. We’ll just have to wait and see how that comes out.”

Baucus repeated Reid’s line after the conference committee meeting concluded. When asked whether he supports including the pipeline project, the Montana lawmaker told reporters: “That’s obviously going to be an issue. We’ll see. It’s too early to tell.”

But Rep. Dave Camp (Mich.), the conference committee’s Republican co-chairman, said he is chiefly concerned with how to offset the cost of the payroll tax cut as well as what reforms to unemployment insurance should be included. Jobless benefit changes were a part of last year’s House-passed payroll tax cut bill but did not make it into the two-month compromise passed in December.

“As you can see, we have our work cut out for us,” Camp said. “I am confident that if every member of this conference committee is committed to finding a solution, we can and will do it.”

Some Democrats — notably Sen. Jack Reed (R.I.) and Rep. Henry Waxman (Calif.) — cast doubt on their willingness to pay for the provisions at all.

“Unemployment benefits have traditionally been covered on an emergency basis without offsetting savings. That should be our guide here. There’s also a case to be made about extending the payroll tax reduction on an emergency basis,” Waxman said.

Both conferees stated, though, that if a pay-for is needed, it should come from a surtax on millionaires or by closing tax loopholes that benefit the wealthy.

“If we need pay-fors for some of these provisions, we should look first to raising revenues from the wealthiest Americans who pay less in taxes than the secretaries who work for them,” Waxman said.

As Members from both parties pile issues onto the conference committee’s plate, one veteran of the failed super committee noted the déjà vu.

“I almost feel like I’ve seen this movie before, but I noticed that the plot and the characters are a little different,” Rep. Xavier Becerra (D-Calif.) said. “I hope that once we have a hard and fast deadline before us, we are able to focus a bit more this time around.”

The committee will meet for the second time Feb. 1. The two-month extension of the payroll tax cut, jobless benefits and the Medicare doctors’ reimbursement fix expires Feb. 29.

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