House GOP introduces bill renewing payroll tax cut

WASHINGTON (AP) — House Republicans introduced legislation Friday that would extend the Social Security payroll tax cut through 2012 and trim extra benefits for the long-term unemployed.

The measure invites a year-end clash with President Barack Obama and Democrats by including language that would pave the way for construction of a controversial oil pipeline.

The legislation, which also seeks to head off an automatic cut in Medicare reimbursements to doctors, is less generous than a version that Obama and congressional Democrats have championed. The GOP measure's cost, which exceeds $180 billion, would be fully paid for by freezing federal workforce salaries, requiring higher earning elderly people to pay more for Medicare and raising some federal fees. But it ignores the higher taxes on the rich that Democrats would use to cover the costs of their proposal.

New details of the GOP measure revealed Friday include provisions that would let states require some applicants for unemployment benefits to take drug tests, prevent welfare recipients from spending their benefits in strip clubs, liquor stores and casinos, and require illegal immigrants and others to submit their children's Social Security numbers before they could receive refunds under the children's tax credit.

The Republican measure would keep the payroll tax that about 160 million American workers pay at 4.2 percent in 2012, the same as it has been this year. It is normally 6.2 percent. Obama proposed trimming the levy to 3.1 percent and giving reductions to employers as well.

Without congressional action, the tax would revert to 6.2 percent on Jan. 1. With next November's presidential and congressional elections looming, both sides have been accusing each other of delays that would result in tax increases for workers.