Payroll Tax Cut: House Republicans Plan Passage of Counter Legislation

House Republicans will roll out their version of the payroll tax cut extension and likely pass it Tuesday. The bill promises to depart wildly from past offerings by both parties in the Senate and brings up the difficult task of bridging a sizable gap between the two.

House Speaker John Boehner, R-Ohio, predicted the $180 billion legislation's approval on Monday. The bill extends the payroll tax cut at its current 4.2 percent rate, includes a provision to push through the controversial Keystone XL pipeline and would reform several social safety net programs. It openly defies an implied veto threat by President Barack Obama and assurances from Senate Majority Leader Harry Reid, D-Nev., the bill does not stand a chance in the other house of Congress.

Boehner Is Undaunted

Boehner was unfazed by the promised bumpy road ahead.

The House is going to do its job, in time for the Senate then to do its job, Boehner said during a press conference on Monday.

The House bill contains several provisions that will garner strong Democratic opposition. The Keystone XL pipeline provision aside, it also seeks to phase out long-term unemployment benefits down to 59 weeks. It will also give states the right to administer drug tests before collecting unemployment.

The bill would also block Environmental Protection Agency rules that would regulate pollution and keep anyone without a Social Security number from collection the children's tax credit.

Senate Democrats' initial version of the bill would lower the rate from 4.2 to 3.1 percent and be largely funded by a 3.25 percent surtax on income over $1 million, a provision Republicans lambasted from the onset.

Democrats Focus on Middle-Class Dimension

The extension of the tax cut, which would largely benefit middle class Americans, has become a bulwark issue for Democrats, who insist on covering the cost of the legislation by imposing a surtax on high income earners. Senate Democrats adopted the bill, a major chunk of Obama's languishing jobs plan, two weeks ago and have hoped to portray Republican opposition as defenders of the rich, in a populist light in their favor.

Obama has pushed Congressional members to remain in the Capitol until a deal is ironed out. If Congress fails to reach an agreement by the new year, the payroll tax will return to its old 6.2 percent rate, costing many families about $1,500 per year.

The bill faces stiff opposition from Congressional Republicans, as its funding comes from a 3.25 percent tax on income over $1 million for joint and single filers. They also argue the bill would do little to stimulate the economy.

The effort represents a last-ditch attempt to tie together a number of provisions that, if expiring, will hit millions of Americans with a tax increase, decrease doctors' Medicare payments and end an extension on jobless benefits.