House Republicans voted Tuesday to give President Obama the payroll-tax-cut extension he desperately wants, but only if he accepts major changes to unemployment benefits and speeds up a decision on building the Keystone XL pipeline, which the administration has sought to delay until after the 2012 election.
The 234-193 vote came just hours after the White House said Mr. Obama would veto the bill if it reached his desk, rejecting the GOP's proposed spending cuts and instead insisting the bill include the tax increases on the wealthy that he has made the centerpiece of his re-election campaign.
Complicating matters, Republicans accused Senate Democrats of holding a massive year-end spending bill hostage to the tax negotiations. With existing funding slated to run out on Friday, the stalemate risks yet another partial government shutdown — the third time this year lawmakers have pushed to the brink.
"The Democrats who run Washington have a responsibility to act," House Speaker John A. Boehner said after the House vote. "The Senate can take up our bill and amend it, or it can pass its own bill. But the Democrats who run the Senate can't continue to shirk their responsibility to govern."
Congress is racing against several deadlines in addition to spending. Unless Congress acts, extended unemployment benefits run out at the end of this year, the 2-percentage-point payroll tax cut expires, and doctors would see a 27 percent cut in payments for treating Medicare patients.
"This is not a time for Washington Republicans to score political points against the president," White House press secretary Jay Carney said after the House vote. "Congress should not finish their business before finishing the business of the American people. They cannot go on vacation before agreeing to prevent a tax hike on 160 million Americans and extending unemployment insurance."
Overall, Republicans say they've tried to give Mr. Obama everything he wants: an extension of the payroll tax cut into next year, another round of unemployment benefits — albeit at lower levels than Democrats hoped — and another round of the so-called "doc fix" that waives the 1997 budget law that tried to control costs by imposing ever-decreasing payments to doctors who treat Medicare patients.
In exchange, the GOP said it wanted to force the administration to make a decision on the pipeline, which would carry oil derived from Canada's tar sands into the U.S.
The administration, caught between environmentalists who oppose the pipeline and labor unions that support it, has tried to put off a final decision on the project until after the election.
But in its veto threat, the White House stayed away from the pipeline and instead criticized the salary freeze on federal workers and other spending cuts the GOP is using to cover the costs of the payroll tax cut.
"[The bill] breaks the bipartisan agreement on spending cuts that was reached just a few months ago and would inevitably lead to pressure to cut investments in areas like education and clean energy," the White House said, also adding that the bill gives "a free pass to the wealthiest."
Republicans said that skewed the facts. They said the summer's debt deal set a ceiling on spending but that Congress always had the option of spending less than the limits agreed to by Mr. Obama and House Speaker John A. Boehner of Ohio.
They also said their salary freeze only extends the one Mr. Obama himself agreed to for the previous two years and does not specifically cut education.
The 369-page bill goes well beyond those issues.
House Republicans included a significant rewrite of unemployment benefit rules, including allowing states to impose drug testing on beneficiaries and to encourage job-seekers to get a high school diploma or a General Educational Development certification. The bill also would prevent millionaires from getting food stamps or unemployment benefits.
In Tuesday's vote, 10 Democrats voted along with 224 Republicans for the legislation, but 14 Republicans were against it, joining 179 Democrats.
Rep. Jeff Flake, an Arizona Republican who voted against the bill, objected to using spending cuts spaced out over 10 years to pay for a one-year tax cut, saying he fears future Congresses will undo the spending cuts and deepen the deficit.
"There's nothing to ensure that this extension is paid for in the future," he said.
His fear may be well-founded. The Medicare doctor-payments fix Republicans included in their legislation is an example of just that.
In its 1997 balanced-budget bill, Congress wrote a formula calling for those payments to be limited in future years in order to control costs. Once the cuts started to bite, Congress voted every year to delay them, at a cost of billions of dollars each year.
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