NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Tuesday, December 20th, 2011

House Republicans formally block payroll tax break “compromise” bill from consideration

As expect­ed, in a series of votes ear­li­er today, House Repub­li­cans for­mal­ly blocked leg­is­la­tion over­whelm­ing­ly approved by the U.S. Sen­ate a few days ago that would tem­porar­i­ly extend the one-year pay­roll tax break enact­ed by Con­gress last year (S. Amdt. 1465 to H.R. 3630) for anoth­er two months.

The House­’s action threat­ens the com­pro­mise on the pay­roll tax break worked out by Har­ry Reid and Mitch McConnell, the respec­tive lead­ers of the Sen­ate Demo­c­ra­t­ic and Repub­li­can cau­cus­es — at John Boehn­er’s request, no less:

When asked Fri­day night whether he had received assur­ances from Boehn­er that the short-term exten­sion would pass, McConnell did not give an explic­it “yes” but seemed to indi­cate things were in good shape.

“I’m opti­mistic that we’re going to do well in the morn­ing, and obvi­ous­ly I keep the Speak­er informed as to what I’m doing,” McConnell said as he left the Capi­tol.

The 48-hour tec­ton­ic shift is indica­tive of either a mis­com­mu­ni­ca­tion between Con­gress’ two top Repub­li­cans or a mis­cal­cu­la­tion on Boehner’s part that he would be able to ral­ly enough votes. Boehn­er had told McConnell and Reid to come up with a solu­tion.

In a state­ment released a short time ago, Reid cas­ti­gat­ed both House and Sen­ate Repub­li­cans for putting the pay­roll tax break exten­sion in jeop­ardy.

“First Sen­a­tor McConnell would not let the Sen­ate vote on the House’s pay­roll tax cut bill because he knew it would fail, now Speak­er Boehn­er won’t let the House hold an up-or-down vote on the Senate’s bipar­ti­san com­pro­mise because he knows it would pass,” Reid said. He also indi­cat­ed that he is not inter­est­ed in recon­ven­ing the Sen­ate to address the objec­tions of Boehn­er and his rebel­lious cau­cus.

“I have been try­ing to nego­ti­ate a year­long exten­sion with Repub­li­cans for weeks, and I am hap­py to con­tin­ue doing so as soon as the House of Rep­re­sen­ta­tives pass­es the bipar­ti­san com­pro­mise… but not before then,” Reid said.

The White House is sid­ing with Reid on the mat­ter.

Pres­i­dent Oba­ma inter­rupt­ed Jay Car­ney’s week­day brief­ing in the James Brady Press Brief­ing Room at 11:07 AM Pacif­ic to denounce the vote and call on House Repub­li­cans to pass the leg­is­la­tion approved by the Sen­ate.

“The clock is tick­ing; time is run­ning out,” the Pres­i­dent told reporters.

“And if the House Repub­li­cans refuse to vote for the Sen­ate bill, or even allow it to come up for a vote, tax­es will go up in eleven days.”

“I saw today that one of the House Repub­li­cans referred to what they’re doing as, ‘high-stakes pok­er.’ He’s right about the stakes, but this is not pok­er, this is not a game — this shouldn’t be pol­i­tics as usu­al.”

We think the Pres­i­dent has this back­wards. Usu­al­ly, cut­ting tax­es or extend­ing tax cuts is some­thing that Con­gress can agree on… even when there is no evi­dence that doing so will real­ly improve Amer­i­cans’ eco­nom­ic secu­ri­ty.

The fact that this blog post is con­cerned with the pol­i­tics sur­round­ing the exten­sion of a pay­roll tax break — rather than, say, the pol­i­tics sur­round­ing leg­is­la­tion to boost a recov­ery by strength­en­ing our com­mon wealth and invest­ing in bad­ly need­ed pub­lic infra­struc­ture — is proof that pol­i­tics as usu­al has been pre­vail­ing all along in the Dis­trict of Colum­bia, to the detri­ment of us all.

As Dean Bak­er says:

It was essen­tial that Oba­ma keep lead­ing the charge on stim­u­lus, explain­ing to the coun­try the cause of the economy’s weak­ness was a lack of demand. This sto­ry is counter-intu­itive so it requires the voice of the pres­i­dent, along with many oth­ers, to con­stant­ly explain the log­ic to the coun­try. Peo­ple had to under­stand that we are poor because the coun­try as a whole is spend­ing too lit­tle to keep the work­force ful­ly employed, not that the gov­ern­ment is spend­ing too much.

This is the con­text in which we are argu­ing over extend­ing the reduc­tion in the Social Secu­ri­ty pay­roll tax for anoth­er two years. As stim­u­lus, this is not an espe­cial­ly good mea­sure. On a per-dol­lar basis, tax cuts will be much less effec­tive, espe­cial­ly with peo­ple car­ry­ing so much debt, than direct spend­ing. Fur­ther­more, many of these tax dol­lars will go to bet­ter off tax­pay­ers who are less will­ing to spend than mod­er­ate-income fam­i­lies. The Mak­ing Work Pay tax cred­it was much bet­ter tar­get­ed.

Mod­ern macro­eco­nom­ics teach­es us that invest­ment by our fed­er­al, state, and local gov­ern­ments is the most effec­tive form of expan­sion­ary fis­cal pol­i­cy (or stim­u­lus) we can pur­sue. But instead of using the bul­ly pul­pit of the pres­i­den­cy to cham­pi­on increased invest­ment in Amer­i­ca, our Com­man­der-in-Chief and his team have main­ly been push­ing tax cuts… and dis­cov­er­ing, to their cha­grin, that Repub­li­cans are only inter­est­ed in cut­ting tax­es if they can so do on their terms.

Hence, the cur­rent stand­off. Every sea­son is now sil­ly sea­son in in our nation’s cap­i­tal, since Repub­li­cans insist on fly­ing the ele­phant above the Stars and Stripes.  And since they have con­trol of both hous­es of Con­gress (Sen­ate Repub­li­cans have de fac­to con­trol of the Sen­ate thanks to the threat of the fil­i­buster) they can hold up the peo­ple’s busi­ness for as long as they like. And they have. Repeat­ed­ly.

If we had to sum up 2011 leg­isla­tive­ly, we’d give it the title, “The Year of Grid­lock.” 2012 won’t be much dif­fer­ent… except that Con­gress prob­a­bly will be in ses­sion few­er days out of the year, part­ly due to the pres­i­den­tial elec­tion.

If we allowed some of the recent tax cuts enact­ed by Con­gress to expire, we could use the rev­enue recov­ered by our com­mon wealth to pay down some of our debt, increase pub­lic invest­ments, and strength­en our social safe­ty net. In oth­er words, by for­go­ing the weak­est form of expan­sion­ary fis­cal pol­i­cy, we could pur­sue the two more stronger forms of stim­u­lus with­out adding to our debt.

Unfor­tu­nate­ly, at present, the peo­ple who sup­pos­ed­ly rep­re­sent us and claim to be look­ing out for our well-being are not even talk­ing about doing that.

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