–House Sets Tuesday Afternoon Vote on House GOP Plan
–Congressional Democrats Hammer Plan as Partisan
–Senate Begins Debate on Balanced Budget Amendments; Votes Wednesday

By John Shaw

WASHINGTON (MNI) – The House will vote Tuesday afternoon on a House
Republican payroll tax cut package, a plan lambasted by Democrats, while
the Senate will begin debating two balanced budget constitutional
amendments.

The House Republican package would extend for one year the current
4.2% payroll tax rate for employees and renew unemployment insurance
benefits for workers who have been unemployed for more than six months.
The plan would extend for two years the so-called “doc fix” to prevent
Medicare payments to doctors from being cut by more than 27%.

The House GOP plan would also remove barriers to construction of
the Keystone XL project and delay a new pollution standard for
industrial boilers.

The package would cost about $195 billion, with about $120 billion
of the cost coming from the payroll tax cut extension, paid for by a
host of spending savings including minor adjustments to the Social
Security and Medicare programs and fees imposed on Fannie Mae and
Freddie Mac. It would also freeze the salaries of civilian federal
workers through 2013.

Congressional Democrats have opposed the plan as a partisan effort
that includes controversial items such as the Keystone XL pipeline and
the change in boiler standards.

The bill is expected to clear the House in a mostly party line
vote.

Senate Minority Leader Mitch McConnell has called on the Senate to
pass the bill, while Senate Majority Leader Harry Reid has blasted the
House GOP plan as a “partisan joke.”

Last year, the White House and Congress agreed on a tax cut package
that included reducing for one year the employee-paid share of the
Social Security tax to 4.2% from 6.2%.

The Senate Democratic plan would have reduced the employee payroll
tax to 3.1%.

A Senate Republican plan would have extended last year’s payroll
tax cut for a year and would have funded it by various entitlement
savings and with a freeze on federal salaries and hiring.

Meanwhile, the Senate will begin a day-long debate Tuesday on two
constitutional balanced budgets, a Republican and Democratic
alternative. The Senate will vote Wednesday on both versions; neither is
expected to secure the requisite two-thirds majority.

The House voted several weeks ago on a House GOP balanced budget
amendment and it failed to get the needed two-thirds majority.

Finally, House and Senate appropriations leaders are trying to nail
down a $900 billion spending package that includes the nine fiscal year
2012 bills that have not been approved.

The negotiators are trying to assemble a final package by Tuesday
so the spending package can pass Congress by the end of the week. A
stop-gap bill funding the federal government expires Friday. The fiscal
year began Oct. 1.

Congressional leaders have said they hope to adjourn for the year
Friday, but the deadlock on the payroll tax cut extension could push
back this adjournment date.

** Market News International Washington Bureau: (202) 371-2121 **

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