House GOP: Let’s Extend The Payroll Tax Without Pay-Fors

House Republicans are now offering to extend the Payroll Tax Cut without offsetting spending cuts or tax increases, which has been the issue holding up an extension since December:

Feb. 13 (Bloomberg) — Congressional Republicans are offering to drop their demand to finance a 10-month extension of the payroll tax cut with spending reductions, three aides of both parties who are familiar with the talks said today.

The Republican proposal reflects the desire to avoid being blamed for an impasse, as they were for a breakdown in talks that almost caused the tax break to expire at the end of December, said one of the staffers, a Republican leadership aide who spoke on condition of anonymity.

Democrats have proposed a surtax on the income of those earning more than $1 million a year. The Republicans’ proposal is an attempt to defuse the tax issue, the Republican aide said.

This offer doesn’t include the extension of unemployment benefits, which would still have to be paid for in some way, but it’s an interesting offer politically since it essentially puts the ball firmly in the Democrats court.

Here’s the statement from the House GOP:

“We support the work of our conference negotiators and continue to support a responsible resolution that extends current payroll tax relief, reforms and extends unemployment insurance, and includes a Medicare ‘doc fix.’  Republicans have attempted to reach an agreement and negotiated in good faith for months, and we will continue to do so.  Unfortunately, to date, Democrats have refused virtually every spending cut proposed – insisting instead on job-threatening tax hikes on small business job creators – and with respect to the need for an extension of the payroll tax cut, time is running short.

“Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue regarding offsets, unemployment insurance, and the ‘doc fix.’  If Democrats continue to refuse to negotiate in good faith, Republicans may schedule this measure for House consideration later this week pending a conversation with our members.  Democrats’ refusal to agree to any spending cuts in the conference committee has made it necessary for us to prepare this fallback option to protect small business job creators and ensure taxes don’t go up on middle class workers.

“This is not our first choice.  Our goal is to reach a responsible agreement in conference.  But in the face of the Democrats’ stonewalling and obstructionism, we are prepared to act to protect small businesses and our economy from the consequences of Washington Democrats’ political games.”

Leaving aside the partisan rhetoric, which is to be expected, it does put the Democrats in an interesting position vis a vis the Payroll Tax Cut.

FILED UNDER: Congress, Deficit and Debt, Quick Takes, Taxes, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. Hey Norm says:

    “…Leaving aside the partisan rhetoric…”

    Fine…but in doing so you simply accept the underlying falsehood of the rhetoric…and abdicate any pretense of analysis.
    I’m just sayin’

  2. legion says:

    Well, last time around, Boehner thought he had an agreement with “the House GOP”, and you all remember how well _that_ turned out… what is the likelihood this “agreement” will still exist when the legislation flows?

  3. @Hey Norm:

    A press release from the House Democrats would be filled with exactly the same annoying partisan nonsense. It’s best to just ignore it no matter who it comes from.

  4. Rob in CT says:

    So the idea is to break out the payroll tax cut extension from those other matters.

    The choice for the Dems seems to be:

    a) Agree, and declare victory; or
    b) Insist on a broader deal (UI, doc fix, whatever).

    My gut reaction is to go with option A.

  5. Hey Norm says:

    Yup…the same old craven “pox on both your houses” stand.
    Predictable if nothing else.
    I suggest renaming the blog…considering most of you live in or near the beltway…to BOTH SIDES DO IT

  6. If you don’t think the House Democrats, Senate Democrats, and DNC issue press releases filled with similar rhetoric aimed at Republican then you need to take your partisan blinders off

  7. Hey Norm says:

    Of course they are filled with similar rhetoric.
    But when your own mission statement says:

    “…We’re an online journal of politics and foreign affairs analysis…”

    someone might expect some…oh, I don’t know…analysis perhaps…beyond the omnipresent and chicken$hit “BOTH SIDES DO IT”.
    For instance you might look at the sentence: “…Republicans have attempted to reach an agreement and negotiated in good faith for months, and we will continue to do so…” and review the record of Republicans in the 111th and 112th Congress when it comes to negotiating.
    But probably not.

  8. sam says:

    When you’re approval rating is lower than whale shit, this move is not surprising.

  9. Tano says:

    @sam:

    When you’re approval rating is lower than whale shit

    Not hard to do. Whale shit floats. LINK

  10. Ben says:

    Unfortunately, to date, Democrats have refused virtually every spending cut proposed – insisting instead on job-threatening tax hikes on small business job creators

    If you are NETing over 1 million a year, you aren’t a small business anymore.

  11. Hey Norm says:

    @ Ben…
    It’s worse than that.
    When asked to provide examples of these so-called job creators Republicans have been unable to do so.
    http://www.npr.org/blogs/itsallpolitics/2011/12/09/143398685/gop-objects-to-millionaires-surtax-millionaires-we-found-not-so-much
    Like most Republican arguments…this one too is based on fiction.

  12. Brummagem Joe says:

    So much for the deficit is all important….but not that important if it involves a tax hike for millionaires. But that aside this is a huge retreat for Republicans that must be creating more potential problems within their caucus than it ever does for Democrats. As to decoupling it from the doc fix and unemployment extension this is not much of an issue surely. Even if the Dems in the house vote for this proposal the Dems in the senate just tack them back onto their version of the bill it goes to conference and then the house has to vote again on the bill with the provisions coupled back up. And I don’t see McConnell and Boehner going to the stake over this but who knows.

  13. Tillman says:

    If you don’t think the House Democrats, Senate Democrats, and DNC issue press releases filled with similar rhetoric aimed at Republican then you need to take your partisan blinders off .

    Not a matter of partisanship. Partisan does not equal bad. It’s a matter of correspondence with reality. Y’know, truth. Ulterior motivation and such is a lovely excuse to dismiss rhetoric of any stripe, but in the end I care most about whether what’s being said is true or not, regardless of source.

    I believe Norm sums up the rest of my problems with your dismissal.

    My gut reaction is to go with option A.

    Let’s hope, shall we?

  14. Brummagem Joe says:

    @Hey Norm:

    For instance you might look at the sentence: “…Republicans have attempted to reach an agreement and negotiated in good faith for months, and we will continue to do so…” and review the record of Republicans in the 111th and 112th Congress when it comes to negotiating.
    But probably not.

    Doug is not and never has been a supporter of the Republican party. Didn’t you know this?

  15. James says:

    @Doug Mataconis:

    If you don’t think the House Democrats, Senate Democrats, and DNC issue press releases filled with similar rhetoric […]

    I think the problem is that you’re reading the press releases at face value.

  16. The bottom line is that economists like Howard Gleckman and Bruce Bartlett agree that extending the “temporary” payroll tax holiday is not the best way to stimulate the economy because it is poorly targeted and won’t be paid for. http://bit.ly/uvIDMJ

    Also, according to this chart from Ezra Klein, the 2011 payroll tax cut only accounted for 0.2% of the 1% growth in GDP due to personal consumption. http://wapo.st/vJuYMH

    If last year’s payroll tax cut only raised GDP by 0.2% in a year how can economists like Mark Zandi argue that extending the payroll tax holiday for another year will increase GDP by a whole 1%? http://bit.ly/wetadR

    Would extending the payroll tax holiday for 2012 really will have differing effects on economic growth?