Wednesday, December 21, 2011

Who's to blame for the payroll tax cut uncertainty?

U.S. House Republicans are getting assailed this morning for rejecting a bipartisan Senate compromise to extend the payroll tax cut.

As of this morning, the cuts are in jeopardy. House Republicans are ready to talk to the Senate about how to extend cuts for a full year, rather than the two months the Senate approved 89-10. That was rejected by the House on Tuesday, and the Senate and White House have said that there will be no more negotiating.

The Republicans are clearly betting that Americans will wonder why the Senate can't come back to work between now and Jan. 1 to work on improving the legislation. Senate Democrats and the White House believe that the public believes this is another obstructionist move by conservative Republicans.

Thus far, the Democrats are right. Opinion from the left and right is overwhelmingly against the House. Tell us what you think in our unscientific poll to the right.

First, our view: We can't vouch for the purity of Republican motives, but as our editorial says this morning, we think the two-month extension is bad policy. If the choice is that flawed legislation or no tax cut extension, we'll take the two months. But we think the Senate can and should try to do better.

What does everyone else think? A sampling:

A bad sign for the House: It has lost the conservative Wall Street Journal editorial board, which lashed out at the GOP's "circular firing squad." Said the WSJ editorial:

The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play.

Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he's spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible.

The Washington Post's Dana Milbank thinks the Republicans are more false-hearted than Bravehearts. (Post readers agree - 93 percent vote that the payroll tax uncertainty is John Boehner's fault.)

The Post's Ezra Klein, often the most sensible voice in the room, examines why Boehner has sent the bill to conference committee. Klein hints that Boehner is positioning himself to ultimately cave in to the Senate agreement.

Guy Benson of the conservative Town Hall says that Washington's dysfunction is on full display. He says there's plenty of blame for both parties to share.

The Hill has video of John McCain telling CNN that the House's move is "harming the Republican Party," plus a comment from GOP Senator Bob Corker urging the House to resolve the issue.

Finally, Time's Adam Sorenson says four things can happen from this point on:

Either the House swallows bile, bends to the will of the Senate and passes the two-month bill unconditionally. Senators return from their vacations to negotiate a new deal with the GOP. Democrats and Republicans simply let the tax cut expire and jostle for the coveted position of slightly less reviled political party while the economy suffers–a tax hike on 160 million Americans, the loss of unemployment benefits for millions of others, a 27% cut to doctors’ Medicare fees– in the aftermath. Or the two parties manage the kind of 11th-hour, mutually unsatisfactory, gimmicky deal that’s already inspired so many ill feelings this year, either through conference committee or some provision attached to the two-month extension that would set the stage for a new agreement when Congress returns in January. Happy holidays.

Tell us what you think.

Peter St. Onge


EuroCat said...

Sorry to say, it's all on my party (Republican) - particularly the House Republican "leadership" - this time.

On page 33 of the Republican "Pledge to America" from September 2010, "leadership" clearly promised:

"We will end the practice of packaging unpopular bills with “must-pass” legislation to circumvent the will of the American people. Instead, we will advance major legislation one issue at a time."

They lied.

The reason that 89 senators -including 39 Republicans - had to settle for the 2-month compromise is that House Republicans have continued to break their own pledge, larding up a "clean" payroll-tax extension with all sorts of unrelated, partisan garbage...just the sort of thing they promised in September 2010 to stop doing.

snoopy28215 said...

It's the Republican party that is to blame. They expect the tail to wag the dog. They refuse to compromise so they are holding us hostage.

Garth Vader said...

Fannie, Taylor, Peter,

A couple of weeks ago I asked for you to provide YOUR solution to the Social Security funding gap that would result from extending the payroll tax cut. Where is it? You look pretty bad just yapping anti-House rhetoric without ANY numbers to back it up.

Put up or shut up.

Garth Vader said...

So, in the Observer's opinion:

Allowing the payroll tax cut to expire is "another obstructionist move by conservative Republicans".

Fighting the expiration of the Bush tax cuts is "another obstructionist move by conservative Republicans".

Not being able to find the hot Christmas toy at Toys R Us is "another obstructionist move by conservative Republicans".

Obesity, diabetes, bad breath and icy roads are "obstructionist moves by conservative Republicans".

Euroexpat said...

I hope all those people getting their money now, do not expect to get them in their retirements/SS payments.
If you put $200 a month in your savings acct and later lower it to $100 a month, I hope no one is expecting to have $2,400 at the end of the year.
It is not a tax because people are funding their own retirements. Thus it can't be a tax cut.

EuroCat said...

Actually, "Garth Vader" and "Euroexpat", the social security "funding gap" is closed in the Senate bill: the 2% not being collected is being replaced by an additional fee on mortgage originations. So, social security is not being underfunded as a result of the bill.

Admittedly, the mortgage fee is a bad source of revenue, since it will hit middle-class homebuyers hardest. However, the original suggestion - a tiny surtax on multimillionaires - was shot down by the class warriors in both parties, who are terrified of the super-rich who fund their campaigns, and who see nothing wrong with a society in which six heirs in a single family - six - hold more wealth (inherited, of course) than 30 percent of the population combined.

Six people have more money than 95 million Americans combined. You just can't make this stuff up.

Joseph said...

Rublicans passed a bill. The Democrats in the Senate have left the building and won't be back to do anything with it. Looks like the Dems are holding things up (again).

Euroexpat said...

Eurocat, why others are supposed to be funding one's retirement? Should we also start paying into other people's 401k's? We, the taxpayers, are already funding lifetime pensions for goverment workers, so where does it stop?
And I do not believe a 2% surcharge on mortgages would raise enough money to cover it. We are talking upwards of $100 billion a year.

BTW, I thought people will have additional $2,500 a year since we passed Obamacare. The president said so in the past.
Some time ago Republicans were accused of "raiding" SS trust fund by simply allowing people to divert some money into private accounts. Somehow this is not considered as such

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Jimmie Menon said...

In any organization who has loyal employees, I feel they need to support their employees and I don't mind matching their payroll tax. I say cut income tax not payroll tax.

Jimmie Menon
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