Less than two weeks after the Senate failed to advance two competing payroll tax cut bills, the House of Representatives on Tuesday passed its own measure. Approved by a vote of 234-193, the Middle Class Tax Relief and Job Creation Act of 2011 (H.R. 3630) seeks to extend by one year both the payroll tax cut and emergency unemployment insurance benefits, but also includes a number of sticking points that likely will prevent passage of this House bill in the Senate.

Generally, the bill would, among things:

• Extend the temporary Social Security payroll tax break for employees (currently 4.2% down from 6.2%) through the end of 2012;
• Extend emergency unemployment benefits through January 31, 2013, but reduce the maximum weeks of benefits from 99 to 59;
• Require any unemployment insurance beneficiary to meet minimum educational and job-seeking requirements;
• Allow states to make unemployment benefits contingent upon passage of a drug test;
• Continue for an additional two years a reduction in reimbursements to doctors who see Medicare patients, otherwise known as the “doc fix” provisions; and
• Extend 100 percent business expensing through 2012.

To offset the cost of these benefits, the bill would extend a pay freeze on federal pay raises, increase federal employees’ contributions to their retirement funds, and gradually increase Medicare part B and D premiums for high income beneficiaries, among other changes. Unlike the proposals set forth by Democratic lawmakers, this bill does not impose a tax on millionaires.

Notably, the measure also includes provisions that would expedite the Administration’s decision on whether to authorize the controversial Keystone XL Pipeline project. The Administration has stated that President Obama would veto any bill that contains the Keystone provision, indicating that the bill will be a nonstarter in the Senate.

Since Congress is scheduled to adjourn at the end of the week, and the payroll tax holiday and emergency unemployment benefits are set to expire soon, a compromise measure is still possible.