Get back to work on payroll tax cut bill

Wednesday's editorial tonight:

We don’t often appreciate the obstinacy of the tea party, but U.S. House Republicans were right this week to call on the Senate to do better than produce a two-month extension of a payroll tax cut. Was the House right for the right reasons? We’re not so certain of that.

The House rejected on Tuesday a bipartisan Senate bill that would have extended the tax cut and unemployment benefits for two months instead of allowing them to expire on Jan. 1. Senators had approved the measure with an 89-10 vote before scooting home for a holiday break and promising to tackle a longer extension when they return.

House Republicans objected, however, saying that the solution really wasn’t much of one. We agree. This payroll tax cut and the extended unemployment benefits that are part of the package need to be extended for a year. A two-month extension is bad policy because its brevity doesn’t accomplish what the tax cut intends – giving consumers and businesses enough comfort that they’re emboldened to use the extra money to spend and hire and stimulate the economy. Compromise is laudable, but not so much when it results in a poor product.

Not that there aren’t items to build upon in the compromise bill – specifically, that lawmakers are paying for the tax cut extension. (It would be largely covered by an increase on the fee that government-backed Fannie Mae and Freddie Mac charge to insure new mortgages and refinancings.) But one House member told the Washington Post that “at minimum,” the extension should be 90 days to match the quarterly schedule on which many corporations pay taxes. Other House Republicans noted rightly that on principle, Washington shouldn’t nudge another important decision down the road.

Skeptics might argue that previous episodes of legislative can-kicking this year were due primarily to House inflexibility on debt reduction – and that this week’s principled stand is really about political maneuvering. What House Republicans really want, some believe, is to avoid a payroll tax cut they privately oppose while putting blame on a Democratic-led Senate for refusing to hammer out a solution.

All of which might be true. But if that gambit forces senators to come back to Washington and build on the two-month extension, we’re all for it. Last we checked, there’s still more than a week left before the new year. Most Americans are scheduled to work between now and then; we welcome the Senate to do the same.

Still, Republicans in the House are taking a significant risk. If senators choose not to open new payroll tax cut talks – or if they return to face House proposals as rigidly ideological as their debt proposals this summer and fall – then Americans will likely blame Republicans for the average of $1,000 that won’t appear in paychecks next year. Democrats will encourage that kind of thinking, as President Barack Obama previewed Tuesday. “Let’s be clear: the bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on January first – the only one,” he said at the White House.

If the choice facing Americans is a flawed two-month compromise or no payroll tax cut extension, the compromise sounds good to us. But Congress can do better than that. We sure hope it doesn’t do worse.