CONGRESS AVERTS GOVERNMENT SHUT-DOWN, BUT BATTLE LOOMS OVER PAYROLL TAX CUT, UNEMPLOYMENT, AND OTHER KEY ISSUES

By Miriam Raftery

December 16, 2011 (Washington D.C.) – Final votes are expected today in both houses on a compromise funding measure to avoid a government shut-down--just in time for the holiday adjounrment. 

The deal came after Democrats conceded to Republican demands to remove extensions on a payroll tax cut and unemployment benefits, which will be voted on separately. 

Republicans abandoned efforts to slash funds for environmental protections. Republicans also scored a win for the “1%” of wealthiest Americans by forcing Democrats to remove a tax on millionaires. The $1 trillion spending measure provides full funding through fiscal year 2012 for most agencies including the Pentagon, Education, and Environmental Protection Agency.  

But a divisive battle still looms as Congress next takes up the payroll tax and unemployment benefit extensions sought by Democrats.  Republicans, who oppose those measures, want to link any extensions to speeding approval of the controversial Keystone XL oil pipeline which would create jobs, but also has serious environmental consequences. Other proposed changes could impact Medicare recipients, retirees, and many more.

According to the Washington Post, Senate Finance Committee Chair Max Baucus has stated that  Republicans also want to link eligibility for unemployment benefits to the level of joblessness in each state.

The debate comes on the heels of new census data showing that one in two Americans – half—are now poor or low income, in part due to high unemployment nationwide. 

Democrats have long been pushing for a payroll tax measure. President Barack Obama has chastised Republicans in Congress for blocking the measure, which he characterized as a tax break for the middle class.  House Republicans countered by passing a revised payroll tax bill which Democrats described as loaded with “poison pills.” One of those would kill a measure protecting clean air—a provision estimated to save 20,000 lives.  View a video of California Senator Barbara Boxer discussing  her concerns over the measure: http://www.realclearpolitics.com/video/2011/12/13/boxer_poison_pill_in_gop_payroll_tax_bill_will_kill_8100_people_for_christmas.html  Other “poison pills” included the Republicans’ plan to pay for a payroll tax cut extension by imposing a means test for Medicare beneficiaries, freezing pay for federal workers, making federal retirees pay  more for healthcare, and hiking fees on banks doing business with Fannie Mae and Freddie Mac.

“We need to begin real negotiations on how to prevent a $1,000 tax hike on American families,” Senate majority leader Harry Reid (D-NV) said, Huffington Post reported.  House Minority Leader Nancy Pelosi (D-CA) derided the “do nothing” Republican-controlled House of Representatives for failing to help struggling American families while protecting the interests of millionaires. “It’s a year of missed opportunities and made-up crises,” she said in a press conference Friday, the Hill reported.  The office of House Speaker John Boehmer (R-Ohio) responded by blaming Democrats for the crisis.

Republican leaders, meanwhile, praised the compromise spending measure slated to be voted upon today.  “In spite of many unnecessary obstacles, it is good to see that responsible leadership and good governance can triumph,” House Appropriations Chairman Harold Rogers (R-KY) said last night regarding the spending plan.

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