Representative Dave Camp, Chairman of the Committee on Ways & Means, introduced H.R. 3765, the Temporary Payroll Tax Cut Continuation Act of 2011, on December 23, 2011.  This bill temporarily extends or delays a number of provisions that were set to expire or take effect on January 1, 2012, until February 29, 2012, when Congress will again have to act on these provisions including: an extension of the payroll tax rate deduction and specific federally funded Unemployment Insurance (UI) benefits,  and the implementation of the Medicare Sustainable Growth Rate (SGR).  H.R. 3765 also requires President Obama to act on the Keystone XL Pipeline project. The House passed H.R. 3765 by a voice vote on December 23, 2011.  It was then passed by the Senate and signed into law by the President on that same day, ensuring that these specific provisions were granted extensions before the beginning of 2012.

Given the terms of the compromise bill, the standard Social Security payroll tax rate remains two percentage points lower for employees – 4.2% for employees and 10.4% for the self-employed.  Prior to 2011, employees and employers each paid 6.2% of an employee’s earnings, equaling a 12.4% payment toward the Social Security trust fund.  H.R. 3765 extends this tax cut until February 29, 2012.  Also extended in H.R. 3765 are the Emergency Unemployment Compensation (EUC) and Extended Benefit (EB) programs for unemployed Americans.  These programs allow individuals living in certain states with high unemployment rates to extend their unemployment benefits for up to 99 weeks.  These provisions are also now set to expire on February 29, 2012.

Another provision included in this bill was a delay in cuts to reimbursement rates for physicians who treat Medicare patients.  Without the enactment of this bill, Medicare physician payment rates would have faced a 27.4% cut on January 1, 2012, caused by the Sustainable Growth Rate (SGR) system.  The SGR is the statutory method for determining the annual updates to the Medicare physician fee schedule.  The effects of the SGR have now been delayed until February 29, 2012, allowing Congress time to address the SGR formula and ensure that seniors using Medicare have access to quality health care.

Lastly, H.R. 3765 includes a provision that requires the President to issue a permit to start building the Keystone XL pipeline.  In 2008, Canadian pipeline company TransCanada filed an application to build the Keystone XL pipeline, which would transport crude oil from Alberta, Canada, to refineries on the U.S. Gulf Coast.  The pipeline would have the capacity to transport approximately 830,000 barrels per day is projected to create 20,000 direct jobs, and spur the creation of 118,000 spin-off jobs.  Since signing this bill on December 23, 2011, President Obama has 60 days to issue this permit unless he determines that the pipeline would not serve our national interest, which would then require the President to submit a report to Congress providing justification for such a determination.

While Congress was able to come together and pass this bill before the January 1 deadline, H.R. 3765 was not the solution I had hoped for.  Instead of working to create a more responsible fix to these issues, the Senate deferred to a more temporary solution, simply kicking the can down the road and creating a cloud of uncertainty for Americans who depend on these services.  On December 13, 2011, the House passed H.R. 3630, the Middle Class Tax Relief and Job Creation Act, which offered a responsible, one-year extension of the payroll tax cuts and UI benefits, while also ensuring that doctors would not see a cut in reimbursement for treating seniors on Medicare.  Instead of passing H.R. 3630, the Senate opted for a shorter extension package, forcing Congress to revisit these issues and find a new solution before the February 29 deadline.  I am committed to working with my colleagues in Congress to find a more responsible, long-term answer to this issue.