Update on H.R. 3630, the Middle Class Tax Cut

On Tuesday, the House of Representatives voted to continue working to prevent the payroll tax holiday from expiring at the end of the year.

Murphy Addresses House Floor on the Payroll Tax Holiday

This fall, President Obama called for a year-long extension of the payroll tax holiday and last week the House of Representatives delivered to the Senate a year-long extension. That legislation, the Middle Class Tax Relief and Job Creation Act (H.R. 3630), passed with Rep. Murphy’s support on a bipartisan vote of 234-193.  H.R. 3630 also extended several expiring provisions like unemployment and reimbursement for physicians who care for Medicare patients, as well as job creation measures like the Keystone XL Pipeline. A key component to the bill were reforms to unemployment such as drug testing of unemployment recipients, placing the jobless into worker retraining programs, encouraging beneficiaries to obtain their GED or high school diploma, and requiring recipients to prove that had applied for work.

The House bill was taken up in the Senate on Saturday, December 17 and approved but with significant changes. In addition to shortening the timeframe of the payroll tax holiday, unemployment benefits, and Medicare physician reimbursements down to just two months, the Senate bill also eliminated critical accountability measures and taxpayer protections to unemployment programs.

This new version was sent back to the House for consideration, but in a surprise move, all senators left town for Christmas vacation without waiting for the House to take up the new bill. So on Tuesday, while the House voted with Rep. Murphy’s support to create a House/Senate Conference Committee to keep Congress working to deliver a bill for the President’s signature before the end of the year, the Senate remained in recess.

“As families and small businesses sit down to pay off year-end bills and plan out their budgets for next, Congress can do better than an eight week band-aid. In uncertain times, the one-year proposal already adopted by the House makes certain that next year, taxes are kept low and jobs are created,” said Rep. Tim Murphy, who was on KDKA Radio 1020AM this morning to discuss the payroll tax debate.

“These remaining eleven days in the calendar year give us ample time to continue working for the American people, hammer out an agreement, and prevent tax increases,” said Murphy. “There’s no reason why we can’t stay in Washington and complete our shared responsibilities on getting to a solution.”

He added that, after the disappointing failure of the so-called “Supercommittee,” Congress should go above and beyond the call of duty to get this done, which includes missing the holidays back home. Murphy also expressed his concern that the Senate’s two-month plan could actually end up costing more than it saved and showed a lack of understanding for how policies affect families and businesses in the real world.

On Monday, the National Payroll Reporting Consortium (NPRC) weighed in with both House and Senate Leadership on concerns that the Senate bill “as written could create substantial problems, confusion and costs affecting a significant percentage of U.S. employers and employees.” The NPRC noted that the Senate plan would force new costs onto employers who would have to reprogram their accounting systems to implement a short-term fix.

“One of the problems with Washington is there are too many ‘experts’ writing bills without having lived in the real world, made a payroll, or ran a business,” said Rep. Murphy who owned and operated a psychology practice prior to serving in elective office. “The notion that the federal government can set tax policy in two month increments without doing any harm isn’t credible. It’s this kind of legislating that’s created needless obstacles resulting in an economic standstill.”

The Senate’s two month extension of the payroll tax would equate to an extra $167 for the typical working family. On Tuesday, Rep. Murphy went to the House floor to explain what families could do with a $1,000 from the House bill (to watch the video click here).

“This moment represents our best opportunity to put people back to work. I’d rather see Americans collecting a paycheck than an unemployment check. In this economy, there’s no excuse for putting off creating jobs when we can do it today,” said Rep. Murphy. “I urge the Senate Majority Leader to do the right thing and call the Senate back to work from vacation to get this resolved.”