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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