Boehner looks to sweeten tax deal with Keystone plan

In an effort to attract Republican votes, House GOP leaders are considering tacking on legislation advancing the controversial Keystone XL pipeline to a package that would extend a payroll tax holiday. American workers would be hit with an average $1,000 tax hike on Jan. 1 if the tax holiday is allowed to expire at year’s end.

House Speaker John A. Boehner (R-Ohio) met behind closed doors with rank-and-file lawmakers Friday morning, but opposition to continuing the payroll tax break still runs high among conservatives in the House, showing the difficulty Boehner will face in drawing backing for the measure.

The prospect of adding the legislation to advance the pipeline, which the Obama administration has put on hold, did little to generate support for the forthcoming package. GOP leaders proposed a list of domestic spending cuts that could be used to pay for extending the payroll tax cut, unemployment insurance benefits and other measures that expire at the end of the year. They also suggested tacking on a GOP-favored environmental deregulation measure.

“I’m just not sold on this payroll tax extension, this unemployment extension” said Rep. Allen West, a freshman Republican from Florida. Like many foes of the payroll tax break, he said he opposes the way it reduces the revenue stream to Social Security -- even if those funds are replenished with spending cuts elsewhere in the budget.

The GOP has been divided over the payroll tax break, even as Republican leaders have tried to coalesce around the hot-button political issue. Failure to extend the tax break would result in a potentially unpopular tax hike that leaders of both parties hope to avoid.

The depth of the GOP dissent was on display in the Senate, where a majority of Republican senators voted Thursday to block the Democratic proposal to pay for the tax break by raising taxes on those making $1 million or more a year, as well as the GOP’s own offering to fund it with other spending reductions.

The issue now volleys to the House, where Republican leaders will try to devise a package over the weekend that can be presented to lawmakers next week.

If Boehner is unable to win support from his troops, he will be forced to rely on Democrats to secure support for the package, as he has on other must-pass budget legislation this year that ran into GOP resistance.

lmascaro@tribune.com