WASHINGTON — Defiant Republicans pushed toward House passage Tuesday of legislation to extend Social Security payroll tax cuts long sought by President Barack Obama. But they sparked a veto threat by including construction of a much-disputed oil pipeline from Canada to Texas.
Passage would send the bill to certain demise in the Democratic-controlled Senate, triggering the final partisan showdown of a remarkably quarrelsome year of divided government.
In debate on the measure, House Democrats accused Republicans of protecting "millionaires and billionaires, " Senate Majority Leader Harry Reid of Nevada derided the GOP-backed pipeline provision as "ideological candy" for the tea party set and Republicans mocked Obama's objections.
"Mr. President, we can't wait," said House Majority Leader Eric Cantor of Virginia, employing a refrain the White House often uses to criticize Republicans for failing to take steps to improve an economy struggling to recover from the worst recession in decades.
"You can't be for the middle class, you can't be for keeping taxes low, and be against our Middle Class Tax Relief and Job Creation Act," Cantor said.
At its core, the measure did include key parts of the jobs program that Obama asked Congress to approve in September.
The Social Security payroll tax cuts approved a year ago to help stimulate the economy would be extended through 2012, avoiding a loss of take-home income for 160 million Americans. And an expiring program of unemployment benefits for the long-term jobless would remain in place.
A third major component would avert a threatened 27 percent cut in payments to doctors who treat Medicare patients, a provision Republicans added to appeal to conservatives but one that the White House and Democrats embrace, too.
While the tax and unemployment provisions were less generous than Obama sought, he and Republicans clashed principally over steps to cover the estimated $180 billion cost of the measure, and on the proposed 1,700-mile Keystone XL oil pipeline from Canada through environmentally sensitive terrain in Nebraska to the Texas Gulf Coast.
Obama recently delayed a decision on granting a permit for the pipeline until after the 2012 election.
The payroll tax legislation was one of three major bills that Congress was struggling to finish before adjourning for the year, and by far the most contentious.
A measure covering Pentagon spending was ready for passage, and, separately, negotiators said they were close to a deal on a $1 trillion measure to fund most government agencies through the end of the budget year.
That deal was in limbo, though, with Obama and congressional Democrats using it as leverage to keep House Republicans at the table negotiating a final compromise on the tax and unemployment measure.
It was the final showdown of a year that once brought the government to the brink of a shutdown and also pushed the Treasury to the cusp of a first-ever default.
Obama and most Democrats favor an income surtax on million-dollar earners to pay for extending the Social Security tax cut, but Republicans oppose that, saying it is a violation of their pledge not to raise taxes.
Instead, the House bill called for a one-year pay freeze and higher pension costs for federal workers, higher Medicare costs for seniors over $80,000 in income as well as other items to cover the cost.
Obama's veto message focused on economic issues — which unite Democrats — accusing Republicans of putting the burden of paying for the legislation on working families "while giving a free pass to the wealthiest and to big corporations by protecting their loopholes and subsidies."
Republicans drew attention at every turn to the pipeline, which is backed by some lawmakers in the president's party as well as by the blue-collar unions representing plumbers, pipefitters, electricians, carpenters and construction workers.
Estimates of the jobs that would be produced by pipeline construction vary widely but are in the thousands in a time of high national unemployment. The State Department estimated the total at about 6,000; project manager TransCanada put it at 20,000 directly, and Rep. Dave Camp, R-Mich., said in debate on the House floor it was more than 100,000.
Democrats aimed their criticism at the bill's impact on those who would bear the cost.
Rep. Sander Levin of Michigan, the party's senior lawmaker on the Ways and Means Committee, displayed a placard that said "Seniors sacrifice: $31 billion. Federal workers sacrifice: $40 billion. Unemployed Americans sacrifice: $11 billion. Millionaires and billionaires sacrifice: $0."
The bill also "spends $300 million on a special interest provision that helps a handful of specialty hospitals while cutting billions from community hospitals," he said, referring to a part of the measure that will raise federal Medicare payments to doctor-owned hospitals.
Rep. Eliot Engel, a New York Democrat, said he had an open mind about the pipeline but also said it had no legitimate role in the payroll tax bill.
Republicans argued otherwise.1 comment on this story
Rep. Fred Upton of Michigan, the chairman of the House Energy and Commerce Committee, said the pipeline's construction would allow Canada to send one million barrels of oil a day into the United States, lessening domestic reliance on imports.
He said Canadian development of a pipeline is a certainty, and lawmakers needed to decide whether they wanted it to end up in the United States or "someplace like China."
As drafted by Republicans, the measure also would block the Environmental Protection Agency from issuing planned rules to limit toxic emissions from industrial boilers. Republicans said the regulation would be a job killer, and 41 Democrats supported an earlier stand-alone measure to prevent the administration from acting.
Other provisions to cover the cost of the legislation would repeal billions from the health care bill that Obama won from Congress last year when both the House and Senate were under Democratic control and from boosting fees that Fannie Mae and Freddie Mac charge banks for backing their mortgages.