How The House Republicans Completely Mishandled The Payroll Tax Cut Debate

The House GOP doesn't seem to have any idea what it's doing right now.

Ed Morrissey asks this question in the wake of the House’s rejection of the Senate’s Payroll Tax Cut extension:

I have a question — do Republicans on Capitol Hill bother to talk to one another?  If this package was so objectionable, why didn’t Boehner work with Mitch McConnell to force the demanded compromise in the Senate?  Only ten Senators voted against this bill, which means that the overwhelming majority of the Republican caucus gave it the thumbs-up.  Under those conditions, Reid’s anger is entirely legitimate.  He and McConnell worked out a compromise in which Republicans got the pipeline in exchange for a short-term extension that will get Congress through the holidays, but allows the GOP to push for more in later negotiations. Bear in mind that both parties have taken the same approach on budgeting matters — as they did last year in that bout of brinksmanship.

On principle, I’ve got to say that the argument for a one year extension is far superior to yet another temporary stop-gap measure, which seems to be all that Congress is inclined to do these days. Even President Obama admits that given that he has spent the last several months saying that only a one-year extension of the tax cut and unemployment benefits would be acceptable. The House passed a one-year extension last week, but when it got to the Senate it got bogged down in the murky question of how to allocate the “Pay fors” that would cover the reduced revenue to Social Security that would have to be covered by the Federal Government’s general revenues. So, we ended up with the two month extension and the requirement that the Executive Branch make a decision on the Keystone XL pipeline in 60 days, rather than punting it out to after the election as the President so obviously preferred to do.

Ideally, it would be preferable to extend the tax cut, if it is going to be extended at all, for a year rather than kicking the can down the road to the end of February and guaranteeing that this fight will resume again in mid-January. For one thing, we’ve seen more than once that delaying final resolution of these disputed matters just leads to another round of brinksmanship disguised as negotiations. Why anyone thinks it will be easier to resolve this in February than December is beyond me. For another, as I noted this morning, the Senate’s two-month extension seems likely to pose significant logistical difficulties for businesses and payroll processing companies. So, in some sense, the argument for one year vs. two moths seems like a no-brainer. But, of course, this is Washington where pretty much everything that does gone done rarely involves use of very much brain matter.

Ed continues:

If the House thinks holding this up after getting overwhelming bipartisan approval in the Senate will win them political brownie points, they’d better take another look at the polls.  Obama is moving up incrementally on questions of protecting the middle class, and the GOP now wants to give him the position of fighting for a tax cut that Republicans don’t oppose, but won’t approve, either.  If they want to fight for principle in opposing the payroll tax holiday, then this makes sense.  If they want to fight to make it permanent so that its limited ability to impact long-term business and budget planning, then it would also make sense.  But blowing up a compromise simply because they object to a shorter-term gimmick over a slightly longer-term gimmick is fundamentally unserious.

At the very least, it seems like that House Republicans have done a horrible job of communicating exactly what it is they want here. Some, like Jeff Flake from Arizona, have taken the position that the tax cut should not be extended at all, which can at least be respected as a policy position. The House GOP Leadership, though, keeps saying that they want to extend the Payroll Tax Cut, because they know that politically they really don’t have any other choice in the matter. With the Senate having passed a bill that does just that, albeit on a temporary basis, they have not given anything approaching a good explanation for why they would oppose it under circumstances that make it more likely than not that there will be no extension (and no requirement for the President to make a decision on Keystone XL) at all. At this point, if the tax cut does not get extended, then it will be the GOP that gets blamed for it. Politically, that’s just about the dumbest move you can make right before Christmas on the eve of a Presidential election.

Unless the House GOP can find a way out of this, I don’t see it ending well for them, largely because it plays right into President Obama’s hands:

The fraying of a deal to extend payroll-tax cuts and unemployment benefits gives President Obama a golden opportunity to tar House Republicans as the source of Washington’s dysfunction while championing a popular issue.

But the renewed gridlock could still backfire on Obama, who risks being wounded yet again by congressional inaction as he ramps up his reelection bid. Republican opponents on the campaign trail are already blaming him for the mess.

“It’s incredibly tricky ground,” said Lanae Erickson, deputy director of the Social Policy and Politics Program of the centrist Democratic group Third Way. But “there is an opportunity to capitalize on this and hang it around necks of Republicans,” she said. “I think the American people’s patience is wearing thin with the tea party, and they’re really tired of government being held hostage by them. This is just going to be another nail in that coffin.”

It also tends to reinforce the general public attitude about Congress, which was reflected against today in a Gallup poll showing  it’s approval rating to be at another record low of 11%. With nonsense like this going on, it’s no wonder the public is frustrated. How, if it all, that will manifest itself in 2012 remains to be seen, but the House GOP seems to be playing with fire here.

Photo via Associated Press

FILED UNDER: Congress, Social Security, 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:

    First…This all comes back to the bogus debt crisis argument. There is absolutely no reason that they couldn’t have passed the one year extension…which addresses the immediate problem…and figured out how to pay for it later…a long term problem. Borrowing money is next to free right now…and there is no shortage of people willing to lend it to us.
    Second…Every single Republican would vote to extend the Bush Tax Cuts permanently and not ask a single question about it. Clearly it is only tax cuts for the middle class that must be paid for.
    This payroll tax problem thing comes back on the Republicans…but it’s all part and parcel of a dysfuntional political system focused on the wrong problems at the wrong time and making the wrong decisions because of it.

  2. @Hey Norm:

    The problem with that is that both sides have agreed to existing budget rules that require “pay-fors” in these types of situations. In order to override those rules in the you’d basically need a 2/3 majority in both houses.

  3. @Hey Norm:

    Also, I’d point out that only a fool would believe a Member of Congress or Senate who promised they’d figure out how to pay for something “later.”

  4. Jib says:

    House repubs must really miss Nancy. They are doing everything they can to see she gets her old job back.

  5. Hey Norm says:

    @ Doug…
    We just saw this work with sequestration…it’s how we got past the equally phony debt ceiling crisis. If it worked for one manufactured crisis it will work for another.
    And…as I stated in my original comment…if we were talking about extending the Bush Tax Cuts they would figure a way around the “pay-fors”.
    The point is that it did not have to happen like this…and wouldn’t have if the Tea bag caucus wasn’t driving dysfunction.

  6. @Hey Norm:

    Since the debt ceiling deal didn’t involve new spending or tax cuts, they didn’t need “pay-fors.” By the way these are rules that have been in place, in one form or another, since the Clinton Administration

  7. mantis says:

    Since the debt ceiling deal didn’t involve new spending or tax cuts, they didn’t need “pay-fors.”

    And the current issue is a tax cut, which Republicans previously held did not need pay-fors. They decided this tax cut does, because it is something Democrats support.

  8. Rob in CT says:

    I think the GOP knows that government dysfunction tends to hurt Dems more than GOPers. The GOP’s core argument is the government sucks at everything except brute force. They then help prove this (note: help. I’m not blaming all government dysfunction on the GOP). The GOP also knows full well that the Dems desperately want to make deals, and will therefore cave in again and again in negotiations. So they just ask for more. And more. And more…

    The big open question is whether/when the Dems finally refuse (and if, having done so, they can actually hang the result on the GOP).

  9. Rob in CT says:

    And by the way, I as a job creator, I hereby demand that the GOP stop creating uncertainty!

  10. @mantis:

    I think I’ve made my opinion of how the House GOP has acted here clear in this post.

  11. James says:

    @Doug Mataconis:

    For one thing, we’ve seen more than once that delaying final resolution of these disputed matters just leads to another round of brinksmanship disguised as negotiations.

    And which party has been consistently responsible for this brinkmanship, Doug?

  12. David says:

    This also creates another question, can Reid ever negotiate with McConnel or do we have to have Bohenor and Cantor in the room too?

  13. @James:

    I know what answer you expect from me. But, I see no innocent parties on Capitol Hill

  14. mantis says:

    @Doug Mataconis:

    I think I’ve made my opinion of how the House GOP has acted here clear in this post.

    You have. I just think it bears repeating that Republicans don’t believe tax cuts need to be paid for, unless Democrats support them.

  15. @David:

    I find it interesting that we haven’t heard a word from McConnell or any member of Senate GOP leadership

  16. David says:

    @Doug Mataconis: What are they going to say? Two choices, the House screwed us or we screwed the Senate (Democrats and Republicans alike).

  17. James says:

    @Doug Mataconis: I find it interesting that your partisanship is so great that, even when confronted, you insist on the usual false equivalence hand-washing.

  18. Jib says:

    @Doug Mataconis: Not true. ‘PAYGO’ was implemented in 1990 and the repubs let it expire in 2002 which allowed them to pass the Bush tax cuts and Schedule D without paying for them. Dems re-instated it in 2007 but suspended it in 2008 and then it was re-instated with loopholes later, and on and off until the current version passed in 2010. A majority of Dems voted for it while a majority of repubs voted against it. There are 150 programs exempt from PAYGO so this version is much less effective than the original.

    But the repubs cant even support that. They hate having to pay for tax cuts. Even the ‘very brave’ Ryan plan has the tax cuts upfront and the spending cuts back loaded 10 years out. Basically the same snake oil the repubs have been pushing for 30 years.

  19. Hey Norm says:

    “…By the way these are rules that have been in place, in one form or another, since the Clinton Administration…”

    Yes…hence the Bush Tax Cuts being the biggest driver of deficits in the out years.

  20. James says:

    @Doug Mataconis: I don’t even “want” you to say anything. I just want you to be more honest in your assessments and analysis.

    Like, say; the Republican Party and specifically the House caucus is waging an incredibly brazen, open and naked campaign of legislative sabotage for the sake of a chance for future electoral gain.

  21. Why anyone thinks it will be easier to resolve this in February than December is beyond me.

    Because Washington isn’t generally known for completely shutting down for two weeks for Valentine’s Day?

  22. @Stormy Dragon:

    You are forgetting the Lincoln’s Birthday/President’s Day recess. And the fact that Congress often is only in session 3-4 days a week to begin with. And, as I understand it, the Senate isn’t scheduled to be back in session until the second week of January

  23. Some, like Jeff Flake from Arizona, have taken the position that the tax cut should not be extended at all, which can at least be respected as a policy position.

    Yes, but not if you also want to make the Bush tax cuts permanent.

  24. Stormy,

    Considering that the FICA tax is *supposed* to be a dedicated tax to fund SSI, the arguments are slightly different.

  25. Hey Norm says:

    “…I find it interesting that we haven’t heard a word from McConnell or any member of Senate GOP leadership…”

    What do you expect ol’ Turtle Face to say? “…We did what Boehner asked us to do…but he can’t keep his caucus in his pants…”
    Senate Republicans up for election are doing plenty talking…Scott Brown:

    “It angers me that House Republicans would rather continue playing politics than find solutions.”

    Dean Heller:

    “There is no reason to hold up the short-term extension while a more comprehensive deal is being worked out. What is playing out in Washington, D.C., this week is about political leverage, not about what’s good for the American people.”

  26. ponce says:

    All you need to know to understand the House Republicans’ action(inaction?) is the fact that the rich don’t pay any SS tax on income above $106,800/year.

  27. Lomax says:

    This is who we need today: Sen. Goldwater, Humphrey, Fulbright, Dirksen, Mansfield, Ervin, Russell, Moynihan. These were real statesmen who put the country first, put their heads together and worked things out. Where are the statesmen today?

  28. John D'Geek says:

    @James:

    Like, say; the Republican Party and specifically the House caucus is waging an incredibly brazen, open and naked campaign of legislative sabotage for the sake of a chance for future electoral gain.

    Which, for the record, is exactly what the Democrats did with the Healthcare legislation not too far back. This Mutually Assured Destruction (MAD) we’ve got going on in DC doesn’t have any innocent parties.

  29. mantis says:

    Which, for the record, is exactly what the Democrats did with the Healthcare legislation not too far back.

    Really? The Democrats sabotaged their own legislation? Interesting.

  30. lunaticllama says:

    Republicans didn’t manhandle anything. The Republican agenda is to raise taxes on and cut benefits to the middle class, so they can lower taxes on rich people and give free money to corporations.

    So, no, Republicans have not been less than clear on their objectives; they want to increase taxes on the middle class. It’s been their clear goal for years, and they have openly discussed raising taxes on the middle class since at least 2010. They believe that the middle class needs to pay more in taxes and receive less government services, because rich people deserve a greater share of this country’s wealth through lower taxes and free money from the government’s coffers.

    Doug will refuse to believe this is their agenda, and it’s pointless to argue with him, because, in his mind, Democrats must always be in the wrong. The only one hiding the ball here is Doug.

  31. ponce says:

    Really? The Democrats sabotaged their own legislation? Interesting.

    The dumber Republican apologists barf out “both sides are doing it” automatically whenever their side covers itself in feces.

  32. MM says:

    @lunaticllama:

    Doug will refuse to believe this is their agenda, and it’s pointless to argue with him, because, in his mind, Democrats must always be in the wrong. The only one hiding the ball here is Doug.

    To be fair, Doug thinks that the GOP is wrong too. It’s just that he thinks both sides are always exactly and equivalently wrong.

    GOP Staffer: *punches democrat staffer*
    Democrat Staffer: “You’re an ass”
    Doug: Neither side is acquitting themselves exceptionally well here

  33. David says:

    I just got home from work and the puppies need to be fed, etc, so I haven’t had time to look. Has McConnell said anything yet? He has to say something eventually, doesn’t he?

  34. Pete says:

    @ponce: Ponce, grow up!

  35. An Interested Party says:

    Ponce, grow up!

    There was nothing immature and/or naive in Ponce’s statement…

  36. James says:

    @John D’Geek: I really don’t have the time or the patience to unpack how ridiculous your statments are. Needless to say, I don’t think you have a strong grasp on how how healthcare economics works.

  37. Liberty60 says:

    @Pete:

    @MM:

    See? Both sides do it!

    Now lets just meet in the middle with a commonsense bipartisan agreement to end Medicare and the capital gains tax.

    Then break for dinner at Applebees.

  38. James says:

    @John D’Geek: Well, quick point. Note the slight of hand here:

    DC doesn’t have any innocent parties.

    Any issue of substance on the Republican parties antics/excessess is waved away with Democratic Party’s lack of “innocence”. In other words “heads I win, tails you lose”.

  39. michael reynolds says:

    I don’t see what the political problem could possibly be.

    Tax cuts for billionaires? GOP says, “Yes, yes, oh God, yes!”

    Tax cuts for working people? GOP says, “Grrrr.”

  40. george says:

    @michael reynolds:

    I don’t see what the political problem could possibly be.

    Tax cuts for billionaires? GOP says, “Yes, yes, oh God, yes!”

    Tax cuts for working people? GOP says, “Grrrr.”

    It does seem to come down to that … they don’t seem to mind taxes for the middle class. Weird.

  41. An Interested Party says:

    It does seem to come down to that … they don’t seem to mind taxes for the middle class. Weird.

    It’s not weird to them…after all, they would tell you that it is the wealthy who are the job creators, not the middle class…

  42. Eric Florack says:

    First…This all comes back to the bogus debt crisis argument. There is absolutely no reason that they couldn’t have passed the one year extension…which addresses the immediate problem…and figured out how to pay for it later…a long term problem. Borrowing money is next to free right now…and there is no shortage of people willing to lend it to us.

    Yes, in fact there is reason. Several actually.
    First what the Dems are proposing amounts to little more than a raid on the social security trust fund.
    Secondly, the only reason the Dems want the short term extension is to allow Obama to claim hes a tax cutter in an election year. (As i say it’s not a tax cut, but…. since when did reality ever enter the Dems mind?)
    Third, we can’t keep kicking the problem down the road forever. short term fixes buying elections is exactly how we got here, guys.

  43. Whitehall says:

    Both sides are dealers in political crack cocaine on this issue.

    First, Social Security needs the money if what I hear is true that it’s in the red this year with inadequate revenues to cover payouts.

    Second, cutting the payroll tax will have few if any macroeconomic effects. BTW, is the RATE being cut but the annual maximum stays the same? That just means less in above-average earners’ paychecks in later months of the year.

    Third, if SS is running a deficit, then we’re just passing it along to national debt. Unlike other posters above, that means we are printing money to cover it, not getting real loans from foreigners. In other words, EVERYONE’s dollars are worth less so there is NO REAL WEALTH creation or savings.

    The GOP erred in allowing the 2% reduction to go out in the first place. I’m with Jeff Flake – let it expire and revert back to “normal” rates. If you are in a real fight, make it over something useful and valuable.

    While the GOP legislative leadership certainly has its faults and shortcomings, remember that with control of only one house, and scorched earth Democrat leadership elsewhere, they are like a chess player handicapped by early loss of his queen. It’s hard to win.

  44. An Interested Party says:

    While the GOP legislative leadership certainly has its faults and shortcomings, remember that with control of only one house, and scorched earth Democrat leadership elsewhere…

    Hahahahaha…what lovely excuses some people make…I guess the GOP is the kinder and gentler party, throwing hugs and kisses at the opposition…

  45. Douglas Fireman says:

    Better that Boehner’s Bumptious Bravehearts got the shaft than the middle class and the poor.