On December 23, 2011, the House of Representatives passed H.R. 3765, the Temporary Payroll Tax Cut Continuation Act of 2011, which provides a two-month extension of the current payroll tax rates and federally funded Unemployment Insurance (UI) benefits. The bill also delays for two months major cuts to the Medicare reimbursement rate. H.R. 3765 was passed by the Senate and signed into law by the President on December 23, 2011.
H.R. 3765 provides Congress until February 29, 2012, to work out a number of significant issues involved in extending the temporary payroll tax reduction, reforming existing federal programs, and stimulating job growth. As you may know, on December 13, 2011, the House of Representatives passed H.R. 3630, which provides for a fully-offset one-year extension of the current payroll tax rates and an extension of reformed Unemployment Insurance (UI) benefits, as well as preventing major cuts to the Medicare reimbursement rate from going into effect. H.R. 3630 was not passed by the U.S. Senate.
H.R. 3630 ensures that current benefits can be extended for those who need them and does so in a way that does not further add to our debt. The bill reforms the UI program to ensure that recipients are actively working and training towards employment. It also makes changes to federal programs, including Medicare and food stamps, to ensure that the wealthiest Americans are paying their fair share.
The bill also includes a number of provisions intended to stimulate job creation, including language that should have allowed the permitting of the Keystone XL pipeline to move forward, which would have created jobs and reduced our dependence on unstable foreign sources of oil. The bill also provides needed regulatory relief and extends tax provisions that help job creators.
I have been concerned about previous efforts to extend the current temporary cut to the payroll tax because of the impact that extending this short-term reduction would have on the Social Security Trust Fund. While I support fundamental tax reform that lowers the tax rate and broadens the base, creating a simpler and fairer tax code, my concern about cutting the payroll tax has been the damaging impact that it has on our already fragile Social Security system. I was pleased that H.R. 3630 not only fully pays for the payroll tax extension, as well as the UI extension and Medicare fix, but it also ensures that the Social Security Trust Fund remains whole. This allowed me to support H.R. 3630 when it came before me, and I was disappointed that this proposal was rejected by the U.S. Senate.
As the House and Senate work through the differences between their longer term proposals to address these issues before H.R. 3765 expires, I am hopeful that both Republicans and Democrats will set partisan politics aside and have a serious conversation about how to meet the challenges facing our nation. It would be a failure of leadership not to take this opportunity to make significant changes to federal programs and our tax code that will benefit the American people for years to come.
