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Payroll Tax Holiday, Jobless Benefits Hang in the Balance

Bill Clark/CQ Roll Call
Speaker John Boehner and other GOP House leaders are trying to piece together a legislative package that extends expiring measures such as jobless benefits and the payroll tax cut.

House Republicans will conference Thursday to figure out how to pass a handful of expiring measures, including jobless benefits and an extension of the president’s payroll tax cut, before the end of the year.

The GOP Conference last week rejected a proposal floated by Speaker John Boehner (R-Ohio), and leadership has spent this week trying to figure out the right combination of items to include in a package that can garner 218 votes on the floor.

Democrats, meanwhile, have hammered the GOP this week on extending the payroll tax cut and unemployment insurance, given that Republican leaders in both chambers have struggled to convince their rank and file that extending the popular tax holiday is politically necessary.

President Barack Obama tried to pre-empt Republicans today when he said he would reject any package to extend the payroll tax break that attached “extraneous” provisions, including approval of a controversial oil pipeline between Canada and the United States. House Republicans have said they might tie the Keystone XL oil pipeline project to the payroll tax in an effort to attract more GOP support.

“If the payroll tax cut is attached to a whole bunch of extraneous issues not related to making sure that Americans’ taxes don’t go up on Jan. 1, it’s not something I would accept,” Obama said in a media appearance with Canadian Prime Minister Stephen Harper.

Obama specifically noted he would reject “any effort to tie Keystone to the payroll tax cut,” adding that “everybody can be on notice.”

Besides the pipeline issue, House Republicans have been discussing the inclusion of several unrelated provisions to the year-end bill, including one aimed at reducing Clean Air Act regulations for boilers.

Some GOP leaders, particularly Majority Leader Eric Cantor (Va.), have suggested including legislation that would grant companies a tax holiday on overseas profits. The idea known as repatriation has a broad spectrum of supporters including Cantor, members of the Blue Dog Coalition and Senate Democratic Conference Vice Chairman Charles Schumer (N.Y.). More than 50 GOP freshmen also sent a letter to House leaders Monday calling on them to include repatriation in the year-end payroll tax package.

A GOP aide acknowledged leaders are shuffling through a lot of moving parts.

“We are working with our Members to find a path forward to ensure taxes aren’t increased on anyone and find resolution on the other end-of-the-year items in a package that can garner 218 votes for passage,” the aide said. “Whether it be repatriation that was included in our jobs plan and has bipartisan support, or another item, the goal is to find support among our Members.”

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