The GOP’s Payroll Tax Fiasco: Even The WSJ Is Ticked Off With Their Own Minions
Cry Me A River….
GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest.
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.
House Republicans yesterday voted down the Senate’s two-month extension of the two-percentage-point payroll tax holiday to 4.2% from 6.2%. They say the short extension makes no economic sense, but then neither does a one-year extension. No employer is going to hire a worker based on such a small and temporary decrease in employment costs, as this year’s tax holiday has demonstrated. The entire exercise is political, but Republicans have thoroughly botched the politics.
Their first mistake was adopting the President’s language that he is proposing a tax cut rather than calling it a temporary tax holiday. People will understand the difference—and discount the benefit.
Republicans also failed to put together a unified House and Senate strategy. The House passed a one-year extension last week that included spending cuts to offset the $120 billion or so in lost revenue, such as a one-year freeze on raises for federal employees. Then Mr. McConnell agreed with Senate Majority Leader Harry Reid on the two-month extension financed by higher fees on Fannie Mae and Freddie Mac (meaning on mortgage borrowers), among other things. It passed with 89 votes and all but seven Republicans.
Senate Republicans say Mr. Boehner had signed off on the two-month extension, but House Members revolted over the weekend and so the Speaker flipped within 24 hours. Mr. Boehner is now demanding that Mr. Reid name conferees for a House-Senate conference on the payroll tax bills. But Mr. Reid and the White House are having too much fun blaming Republicans for “raising taxes on the middle class” as of January 1. Don’t be surprised if they stretch this out to the State of the Union, when Mr. Obama will have a national audience to capture the tax issue.
If Republicans didn’t want to extend the payroll tax cut on the merits, then they should have put together a strategy and the arguments for defeating it and explained why. But if they knew they would eventually pass it, as most of them surely believed, then they had one of two choices. Either pass it quickly and at least take some political credit for it. Or agree on a strategy to get something in return for passing it, which would mean focusing on a couple of popular policies that would put Mr. Obama and Democrats on the political spot. They finally did that last week by attaching a provision that requires Mr. Obama to make a decision on the Keystone XL pipeline within 60 days, and the President grumbled but has agreed to sign it.
But now Republicans are drowning out that victory in the sounds of their circular firing squad. Already four GOP Senators have rejected the House position, and the political rout will only get worse.
One reason for the revolt of House backbenchers is the accumulated frustration over a year of political disappointment. Their high point was the Paul Ryan budget in the spring that set the terms of debate and forced Mr. Obama to adopt at least the rhetoric of budget reform and spending cuts.
But then Messrs. Boehner and McConnell were gulled into going behind closed doors with the President, who dragged out negotiations and later emerged to sandbag them with his blame-the-GOP and soak-the-rich re-election strategy. Any difference between the parties on taxes and spending has been blurred in the interim.
After a year of the tea party House, Mr. Obama and Senate Democrats have had to make no major policy concessions beyond extending the Bush tax rates for two years. Mr. Obama is in a stronger re-election position today than he was a year ago, and the chances of Mr. McConnell becoming Majority Leader in 2013 are declining.
By: Editorial, The Wall Street Journal, December 21, 2011
John Boehner Is Letting The Inmates Run The Asylum
Things are going from bad to worse for Speaker Boehner and the House Republicans.
It hasn’t exactly been smooth sailing for the speaker over the last two years since all his Tea Party freshmen hit town. The good news for him was that he was elected speaker; the bad news was who elected him!
And it is not helpful that House Majority Leader Eric Cantor seems to want his job and is coddling the conservatives in the caucus.
For Speaker Boehner this is like herding feral cats that are getting increasingly wild.
The House rejection Tuesday of the bill overwhelming agreed upon in the Senate (89-10) to enact a compromise on the extension of the middle class tax cuts and unemployment payments was a shock—maybe even to Boehner when his caucus revolted over the weekend.
Anyone who is watching the inmates take over the asylum that is becoming the Republican caucus has got to fear for the country—and the Republican party.
If the House Republicans are responsible for raising taxes this year on the middle class, taking $1,500 out of their pockets as a little Christmas present, they will send the very clear message that they do the bidding of the millionaires and billionaires but put coal in the stocking of working families.
And as America’s businessmen and woman understand, the best prescription for growth, hiring, and greater profits, is a middle class that is well-off enough to buy their products. Starving middle class families does not exactly help their bottom line.
In addition, Republicans cannot make the argument that they are so concerned about the deficit that they want to shackle the middle class but let the wealthiest of Americans continue to get hundred of thousands of dollars in tax breaks that “are not paid for!”
The speaker understands that effectively raising taxes now on middle class families, while continuing huge tax cuts for the richest Americans, simply will not wash.
Such a decision is kryptonite in a political year such as this one.
Hiding behind a conference committee or talking about a year extension is simply hogwash—the Tea Party House members want to kill it, pure and simple.
Speaker Boehner is in real trouble on this one and he knows it; he is better off to cut the crazies loose in his own party, make a deal with Democrats and reasonable Republicans, and move on. It is the right thing to do for the country to prevent a double dip recession and the right thing to do politically. If Cantor tries to dethrone him, so be it, he did the right thing. But, right now, he is getting run over by a right wing caucus out of control.
By: Peter Fenn, U. S. News and World Report, December 20, 2011
Mitch McConnell: GOP Isn’t “Here To Defend High-Income People”
The number two Senate Republican, Arizona Sen. Jon Kyl (R), last week decried attempts by Senate Democrats and President Obama to pay for a payroll tax cut extension with a surtax on millionaires. Despite the fact that payroll tax cut extension would keep an extra $1,000 in the pockets of the average American family, and despite the fact that the millionaire surtax would hit relatively few households, Kyl said he could only support extending the tax cut for working Americans if it was accompanied by massive tax cuts for the wealthy.
This morning on Fox News Sunday, host Chris Wallace asked Senate Minority Leader Mitch McConnell (R-KY) what he made of characterizations of the GOP as the party that defends millionaires, given that more than half of McConnell’s caucus has repeatedly voted against a tax cut for the middle class. McConnell laughed at the assertion before saying the GOP is “not here to defend high-income people.” As proof, McConnell told Wallace that the Republican plan took such drastic steps as to prevent millionaires from receiving unemployment benefits or food stamps:
WALLACE: Why are so many Republicans, including more than half of your Senate Republicans, why are they voting against the payroll tax cut?
MCCONNELL: Well the president’s comments, it’s hard not to laugh, because four out of five of the people they’re targeting, of “the rich people” they’re targeting, are actually business owners who create jobs. Look, we’re not here to defend high-income people. In this bipartisan package that we’re just discussing, we make sure millionaires don’t get unemployment, don’t get food stamps. […] It doesn’t do anything for millionaires, in fact, it goes after them on the benefits side.
McConnell’s assertions seem belied by the facts. Though he insists the payroll tax cut extension will pass, it was the GOP that opposed paying for it through a small surtax on the wealthiest Americans. It was the GOP that opposed any move to raise taxes on the wealthiest Americans in efforts to reduce the deficit — leading to the first credit downgrade in American history and ultimately dooming the super committee. It was his party that nearly shutdown the government in April over the same issue — even though the wealthiest Americans are paying historically low tax rates.
And while McConnell claims the GOP plan “goes after” millionaires “on the benefits side,” it “goes after” low- and middle-income Americans “on the benefits side” even harder. While the GOP opposes any tax increase on millionaires, the House plan to extend the payroll tax cut guts unemployment insurance — one of the most effective means of economic stimulus the government has — reducing the number of weeks one can remain on the program from 99 to 79, and then from 79 to 59.
McConnell’s claims that “four out of five people” Democrats are “targeting” are actually “business owners who create jobs” is equally laughable. NPR last week tested that claim, asking Republican Congressional offices to help them find business owners who opposed the millionaire surtax. Unsurprisingly, since only 2 percent of those with business income would be affected by the surtax, the Republican offices and business lobbying groups couldn’t find anyone for NPR to talk to.
By: Travis Waldron, Think Progress, December 11, 2011
“This Year Belongs To The Republicans”: I Hope They Kept The Receipt.
The Wall Street Journal had an interesting report the other day on the congressional fight over extending the payroll tax cut through 2012. Democrats were quoted as saying they feel like they have the advantage in this debate — they’re the ones fighting for a middle-class tax break — but one Republican said something in response that stood out for me.
Terry Holt, a former House GOP aide who is close to Mr. Boehner, said any perceived political advantage is superficial, compared to the way Democrats have lost ground on spending issues over the past year.
“Democrats are trying to put the best face on a very bad year for them,” Mr. Holt said. “This year belongs to the Republicans.” [emphasis added]
Holt apparently looks back at the nearly-completed year and believes it’s been a good one.
He’s not alone. National Journal published the results of its latest Congressional Insiders Poll yesterday, and one of this week’s questions was, “What grade (A+ through F) would you give the first year of the 112th Congress?” Republicans were fairly impressed — a 39% plurality gave this Congress so far a B, and 28% gave it a C. While 66% of Democrats gave it an F, only 6% of Republicans felt the same way.
To my mind, this Congress is proving to be one of the worst — most destructive, most negligent, most dysfunctional — in the history of the country, but for Republicans, there’s a sense that 2011 wasn’t that bad. Indeed, a month ago, none other than House Speaker John Boehner (R-Ohio) defended his institution, saying it’s his job to make Congress work, “and it is working.”
I wonder what the weather is like in the GOP’s reality.
Look, some of the questions are subjective, but if Republicans can look back at the last calendar year and feel a sense of pride, the obvious question is what exactly they hoped to get out of 2011.
The year has been so miserable, it’s tough to imagine what the GOP finds satisfying. Republicans’ approval rating dropped to levels unseen since Watergate; Congress’ approval rating dropped to a level unseen since the dawn of modern polling. Republicans held the full faith and credit of the United States hostage, on purpose, and caused the first-ever downgrade of the nation’s debt. Neither party has been able to pass any of its major legislative priorities, and thanks to Republican intransigence, compromise between the parties has become a laughable pipedream.
At the same time, the Republican presidential nominating race has become farcical, with random cranks, clowns, and charlatans taking turns as ostensible frontrunners, hoping to serve as the main primary challenger to a core-free, flip-flopping coward who lies with discomforting ease. The more Americans see of the GOP field, the more they recoil.
This isn’t to say that the year has been awful for everyone. The domestic economy and job creation have steadily improved; the United States has scored some major counter-terrorism and foreign policy victories; the American auto industry is starting to flourish after nearly collapsing in 2009; and we saw the formal end of misguided policies like “Don’t Ask, Don’t Tell.”
But the year’s best news invariably resulted from developments that Congress couldn’t screw up and Republicans had nothing to do with.
“This year belongs to the Republicans”? Unless nihilism was the goal — and perhaps it was — I hope the GOP kept the receipt.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, December 10, 2011
Human Weather Vane Mitt Romney Shifts On Payroll Tax Cut
The idea of extending the payroll tax cut polls very well. How do I know? Because human weather vane Mitt Romney suddenly vocally supports it.
When he was asked about President Obama’s jobs plan during a GOP presidential debate in October, Romney was dismissive of the idea of extending the payroll tax cut on the grounds that it would do nothing to create jobs. Here’s his answer, in full (emphases mine):
MR. ROMNEY: No one likes to see tax increases, but look, the–the stimulus bills the president comes out with that are supposedly going to create jobs, we’ve now seen this played in the theater several times. And what we’re seeing hasn’t worked. The American people know that when he–when he went into office and borrowed $800 billion for a massive jobs stimulus program, that they didn’t see the jobs. Some of those green jobs we were supposed to get, that’s money down the drain. The right course for America is not to keep spending money on stimulus bills, but instead to make permanent changes to the tax code.
Look, when you give–as the president’s bill does, if you give a temporary change to the payroll tax and you say, we’re going to extend this for a year or two, employers don’t hire people for a year or two. They make an investment in a person that goes over a long period of time. And so if you want to get this economy going again, you have to have people who understand how employers think, what it takes to create jobs. And what it takes to create jobs is more than just a temporary shift in a tax stimulus. It needs instead fundamental restructuring of our economy to make sure that we are the most attractive place in the world for investment, for innovation, for growth and for hiring, and we can do that again.
MS. GOLDMAN: So you would be OK with seeing the payroll tax cuts–
MR. ROMNEY: Look, I don’t like–(inaudible)–little Band- Aids. I want to fundamentally restructure America’s foundation economically.
Romney gives no indication whatsoever of favoring an extension of the payroll tax. If anything he indicates a willingness to see it rise, saying, “No one likes to see tax increase, but …” to start and giving his much ballyhooed “Band-Aids” answer when questioner Julianna Goldman asserts that he’d be OK with the payroll tax cuts expiring.
That was October. Since then the political winds have started blowing strongly in favor of extending the tax cut—so strongly in fact that, Romney told conservative radio show host Michael Medved, “I would like to see the payroll tax cut extended just because I know that working families are really feeling the pinch right now—middle-class Americans are having a hard time.”
Of course Romney’s camp is outraged at the notion that badmouthing an extension in October and supporting it in December constitutes either a flip or a flop from the famously flexible former Massachusetts governor. “Governor Romney has never met a tax cut he didn’t like,” spokeswoman Andrea Saul said in a statement E-mailed to reporters Monday night. “He has made it clear that he does not believe that by itself the payroll tax cut will create the type of permanent long term change that is needed to turn the economy around.”
Let’s give Romney the benefit of the doubt. Let’s assume that in October he liked the idea of a payroll tax cut extension. The characterization of him as a human weather vane still holds: He kept his support secret in October because he apparently didn’t think a GOP debate audience would cotton to that view; now he’s trumpeting it because the winds have shifted.
Who needs polls when we have Mitt Romney?
By: Robert Schlesinger, U. S. News and World Report, December 6, 2011
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