Good morning! Here are your early morning headlines:

The New York Times: House Passes Extension Of Cut To Payroll Taxes
… [T]he House on Tuesday passed a bill extending a cut in Social Security payroll taxes for 160 million Americans for another year. But the Democratic majority in the Senate vowed to reject the measure. … The bill would extend jobless benefits for some of the unemployed, while reducing the maximum number of weeks of benefits that a worker could receive. It would also … freeze the pay of many federal employees through 2013; increase Medicare premiums for affluent beneficiaries; prevent a deep cut in Medicare payments to doctors; and eliminate more than $20 billion of spending planned under Mr. Obama’s new health care law (Pear and Steinhauer, 12/13).

Los Angeles Times: House Approves Payroll Tax Cut Extension, With Strings Attached
A payroll tax cut package engineered by House Speaker John A. Boehner was overwhelmingly approved by Republicans despite a veto threat from President Obama. … But the Republican win is expected to be short lived, as the bill has limited chances in the Senate, where Democrats oppose the GOP priorities that Boehner added to the bill to win Republican votes. … To pay for the bill, Republicans shun Obama’s proposal to impose a surtax on millionaires. Instead they propose reducing long-term unemployment insurance, cutting federal workers’ pay and asking upper-income seniors to pay more for Medicare, among other provisions (Mascaro, 12/13).

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The Washington Post: Congress Debates Payroll Tax Cut, Government Funding Omnibus
Prospects for a year-end congressional compromise on key tax and spending legislation grew more complicated Tuesday, as the Republican House passed a controversial version of a payroll tax cut extension despite a veto threat from the White House. The increasingly contentious tax dispute threatens to derail what had been an emerging compromise on separate legislation to fund the government through next September, raising the specter of a possible government shutdown this weekend if the conflict is not resolved by Friday (Helderman and Sonmez, 12/13).

The Wall Street Journal: Payroll-Tax Fight Stands In Way Of Year-End Budget Bill
Congress lurched toward another round of political brinksmanship, as haggling over payroll-tax relief has slowed approval of a year-end budget bill needed to keep the government open beyond Friday. The House, on a largely party-line vote, Tuesday passed its version of legislation to extend a payroll-tax break, renew extended unemployment benefits and offset the revenue loss with a package of spending cuts. President Barack Obama promised to veto the bill because Democrats would rather pay for the tax break and jobless benefits with a tax increase on the wealthy than with spending cuts to health care and other domestic programs (Hook, 12/14).

Politico: Payroll Tax Fight Heads To Senate
Democrats in the Senate, who had been weighing proposing their own broad package to extend the payroll tax, jobless benefits and avert a pay decrease for Medicare physicians, are now considering abandoning that move altogether. Instead, once the Senate rejects the House bill, they’ll demand the GOP cut a deal on the payroll bill to move on the spending bill — since Boehner will need Democratic votes to move on that (Sherman and Raju, 12/13).

USA Today: Deal On Payroll Tax Cut Extension Still Elusive
To maintain leverage in the payroll tax cut negotiations, Democrats have slowed movement on a critical “omnibus” spending measure that funds the federal government through Sept. 30 of next year. If Congress does not pass the $915 billion omnibus, or approve a short-term funding measure by Friday, the government will face the third shutdown threat this year. Senate Democrats, fearing House Republicans will approve their versions of the legislation and leave Washington for the holidays, are withholding action on the omnibus measure to negotiate a final payroll tax package that can become law (Davis, 12/13).

Politico: What’s Up, Doc Fix?
Doc fix is Washington shorthand for the Sustainable Growth Formula, a mouthful of a payment plan wrapped into a 1997 budget law. It was supposed to be a so-smart way of linking physicians costs, Medicare enrollment and the GDP. Only it didn’t work. And everyone knows it. The irony is that this annual scramble still occurs even though pretty much everyone in Washington — Democrats, Republicans, politicians, policymakers and the medical establishment itself — have concluded that the SGR system is broken beyond repair and should be replaced (Kenen, 12/14).

The New York Times: Bigger Share Of State Cash For Medicaid
Medicaid has steadily eaten up a growing share of state budgets over the past three years, while education has been getting a smaller slice of the pie (Cooper, 12/13).

Politico: Report: 2.5M More Young Insured
President Obama’s health care reforms have allowed 2.5 million young adults to get medical coverage, according to a new analysis that the Obama administration is set to release Wednesday. The Obama administration says the dramatic decrease in the number of uninsured young adults is due to the president’s signature health care reforms, reports the AP, which obtained a copy of the analysis (Mak, 12/14).

The Associated Press/Washington Post: GOP Candidate Ron Paul Draws Huge Crowds Says No Medicare In Constitution
Republican presidential candidate Ron Paul wants the federal government out of the health care business. Paul is known for his libertarian views, and he’s drawing lots of people in this week’s swing through New Hampshire (12/13).

Los Angeles Times: Blue Shield Coverage Of Care At UCLA Medical Centers May End
A contract dispute between one of California’s largest health insurers and UCLA could force thousands of patients at the university’s medical centers to seek treatment elsewhere if the disagreement is not resolved by the end of December (Helfand, 12/14).

The Wall Street Journal’s Health Blog: Survey: Doctors Have Mixed Feelings About Health Law
Some 44% of doctors said the law was “a good start,” according to a survey carried out by the Deloitte Center for Health Solutions consulting group. Another 44% agreed that the law was “a step in the wrong direction” (Radnofsky, 12/13).

Los Angeles Times: Audit Faults State Health Officials On Medi-Cal Oversight
State health officials have failed to adequately or promptly review the finances of publicly funded managed-care plans responsible for serving millions of Medi-Cal recipients, according to a report released Tuesday by California’s state auditor (Gorman, 12/14).

The New York Times: Aiding Disabled, Nonprofits Rake In State Money
Spending on this little-known home care program, called Community Habilitation, has soared in recent years, creating multimillion-dollar surpluses at some nonprofit agencies and eye-popping salaries and benefits for those who run them. And it helps explain how New York’s costs of caring for developmentally disabled people have ballooned in recent years, creating the nation’s most generous system of Medicaid-financed programs, with little scrutiny of its efficiency or result (Buettner, 12/13).

The Associated Press/Washington Post: US Attorney Announces Arrests Of NJ Doctors, Others Stemming From Alleged Kickback Scheme
Federal authorities charged more than a dozen doctors Tuesday in an alleged kickback scheme, accusing them of receiving cash payments for referring patients to a northern New Jersey diagnostic facility for tests. U.S. Attorney Paul Fishman says 15 doctors and other health care providers have been charged with receiving bribes in exchange for referring mostly Medicaid and Medicare patients to the Orange Community MRI radiology and diagnostic facility in Orange (12/13).