A Fraction of a Tax Cut
Not Much, but Extremist House Republicans Scorn It
If you looked quickly at what the U.S. Senate did on Saturday, it seemed as if it agreed to President Barack Obama’s proposal for short-term middle-class relief by extending the payroll tax cut and unemployment insurance. In fact, that’s not quite what happened.
The two programs were approved in a severely diminished form. Because Republicans rejected a millionaire’s tax surcharge to pay for the extension, negotiators could not reach agreement on a full year’s offset, and, instead, settled for a measly two more months.
In exchange for those eight short weeks of stimulus, Republicans won a provision that forces the president to make a decision on the Keystone XL oil pipeline from Canada in the next 60 days, instead of waiting until after the election. In a sense, the provision liberates President Obama to do the right thing and immediately reject the pipeline, an environmentally treacherous proposal that would create few jobs. The Department of State will not have enough information to approve the pipeline in such a short period.
Speaker John Boehner (Rep., Ohio) and other Republicans had insisted on the pipeline rider in the hopes of falsely tarring President Obama as a jobs-killer if he rejected the project, even though the pipeline would create only a handful of permanent jobs. Then, after winning that demand, Speaker Boehner pulled yet another of his political bait-and-switch maneuvers. He declared on Sunday morning that he and the House majority could not accept a payroll tax cut for only two months rather than a full year.
This was disingenuous, to put it politely. Democrats say Congressman Boehner had fully signed off on the short-term plan until hard-line conservatives in the House expressed outrage on Saturday afternoon that they had not won more than the pipeline provision. If Speaker Boehner’s House had really wanted a 12-month tax cut, it would not have passed a bill earlier in the month full of poison-pill riders designed to kill it. That bill severely cuts jobless benefits, especially in the states with the highest unemployment; eliminates controls on a particularly bad form of industrial pollution; and would make health insurance exchanges more expensive to undermine health care reform.
Speaker Boehner’s opposition makes it clear just how extreme and unreasonable his caucus has become, and how ineffective he has been in controlling its outbursts. By contrast, the Senate passed the two-month extension in an unusually bipartisan vote of 89 to 10. U.S. Sen. Mitch McConnell (Rep., Ariz.), the minority leader, negotiated the compromise and voted for it, as did all but eight Republican senators.
But House Republicans, led by their Tea Party wing, cannot stomach the idea of giving President Obama even a sixth of what he has asked for, especially if it actually helps improve the economy and thus his reelection chances. If they really follow through on this obstinacy, it could cost virtually all workers an average of $1,000 in their paychecks, beginning next month.
A two-month lifeline is a laughably short period. But at least it holds out hope that serious-minded negotiators could use that time to find a way to pay for a middle-class tax cut that doesn’t simultaneously cut back on vital middle-class programs. If the House places economic recovery even a little higher than it does political tactics, it should approve this compromise before the tax cut expires, and then move to a long-term extension.