House GOP leaders sweeten pot for rank and file on payroll-tax cut

House Republicans are injecting controversial environmental and immigration provisions into the payroll-tax bill that could make a final deal with the Senate more difficult.

While the new provisions appeal to a Republican rank and file cool to extending President Obama’s top year-end priority, they are likely to draw objections from the White House and Senate Democrats.

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Chief among these issues is language that would allow for the building of the Keystone XL oil sands pipeline. Speaker John Boehner (R-Ohio) said Thursday that the bill would include this language despite Obama’s threat Wednesday to reject the entire measure if it included that provision.

“The Keystone pipeline will put tens of thousands of Americans to work immediately, it has bipartisan support in the House and Senate and as the prime minister of Canada said, this is a no-brainer,” Boehner said. Boehner and Obama met with Canadian Prime Minister Stephen Harper on Wednesday.

Leaders also added a provision that would keep illegal immigrants from receiving certain tax-credit payments given to families, by requiring that recipients provide more identification information to receive the credit. They said the additional requirements would save $10 billion.

Obama and Senate Democrats want to pay for the payroll-tax-cut extension with a surtax on millionaires, and Senate Majority Leader Harry Reid (D-Nev.) has scheduled a Thursday vote on that pairing. It is expected to fail given opposition from Republicans to the millionaire’s tax.


The new House GOP plan received a warm reception from Republican members, who just a week ago voiced displeasure at the idea of moving forward with the payroll-tax-cut extension.

“I think our members receive the discussion very well,” Boehner said. “While I do not have the vote totals ... I am confident about our ability to move ahead.”

House Majority Whip Kevin McCarthy (R-Calif.) voiced confidence that Republicans could pass the bill next week.

“It will get off the floor,” he told The Hill.

Obama’s veto threat appeared to embolden House Republicans, particularly conservatives concerned that the party leadership was too easily acceding to the president’s demands.

“Always helps. Never hurts,” Rep. Kevin Brady (R-Texas) said with a smile about the president’s threat on the Keystone provision.

Brady, a senior member of the tax-writing Ways and Means Committee, said Boehner tried to rally the conference for “a strong vote” on the package.

“His message was, let’s stick together,” Brady said. “Let’s advance our message together, with a strong vote.”

The pitch, he added, was largely successful.

“I think the leadership put a package together that sells in much of the conference. The comments were very positive today,” Brady said, adding: “Members want to fight for this.”

A House Democratic leadership aide told The Hill that after Obama’s comments, Republicans can expect “little support” from Democrats in passing their package.

Rank-and-file GOP members said they were pleased the bill includes significant reforms to unemployment benefits, which would also be extended in the package. These reforms include limits on eligibility for the program.

“It was stunning change. Last Friday our meeting was so divisive,” said Rep. Mike Coffman (R-Colo.) “It was a 180-degree difference.”

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Added Rep. Allen West (R-Fla.): “You can’t rebuild Rome in a day but I think they made an effort and heard us.”

Republicans have been on the ropes in the tax debate, which had put their party in the unusual position of being defensive about continuing a tax cut. Conservatives have argued that the temporary tax holiday won’t benefit the economy the way permanent cuts to tax rates would.

The bill does not contain a tax-repatriation holiday, something House Majority Leader Eric Cantor (R-Va.) had been pushing for, but it does contain a tax change benefiting small businesses by enhancing the deduction of expenses. Boehner squelched the repatriation idea this week, arguing that budget scorekeepers would score it as increasing the deficit.

“Mr. Cantor and I agree on the issue of repatriation, and we agree that this is not the right place to do that bill as much as we’d like to do it,” Boehner said. “The arena of an overall reform of our tax code is probably the best place to do it.”

The bill also includes a two-year “doc fix” that prevents cuts to physicians under Medicare, lawmakers said.

Rep. Hal Rogers (R-Ky.) said there are no discretionary spending cuts in the bill and that it is funded through cuts to mandatory spending.

Rep. Dave Camp (R-Mich.), chairman of the Ways and Means Committee, suggested rank-and-file members are coming to grips with the fact that they have to move the tax package before Congress adjourns for the holiday season.

“We’re beginning to see a lot of people realize these are the issues we need to deal with,” Camp said.

Members were not given a final proposal on paper, but will receive it by Friday.

Mike Lillis contributed to this story.

— This story was last updated at 12:25 p.m.