December 23, 2011

The GOP’s Payroll Tax Debacle

WASHINGTON – Now that Congress appears finally to have reached a compromise on what must be one of the worst pieces of legislation in years – the temporary payroll tax holiday extension – let’s survey the damage.

WASHINGTON – Now that Congress appears finally to have reached a compromise on what must be one of the worst pieces of legislation in years – the temporary payroll tax holiday extension – let’s survey the damage.

To begin with, what even minimally rational government enacts payroll tax relief for just two months? As a matter of practicality alone, it makes no sense. The National Payroll Reporting Consortium, representing those who process paychecks, said of the two-month extension passed by the Senate just days before the new year: “There is insufficient lead time to accommodate the proposal,” because “many payroll systems are not likely to be able to make such a substantial programming change before January or even February,” thereby “creat(ing) substantial problems, confusion and costs.”

The final compromise appears to tweak this a bit to make it less onerous for small business. But what were they thinking in the first place? What business operates two months at a time? The minimal time horizon for business is the quarter – three months. What genius came up with two? U.S. businesses would have to budget for two-thirds of a one-quarter tax-holiday extension. As if this government has not already heaped enough regulatory impediments and mindless uncertainties upon business.

But making economic sense is not the point. The tax-holiday extension – presumably to be negotiated next year into a 12-month extension – is the perfect campaign ploy: an election-year bribe that has the additional virtue of seizing the tax issue for the Democrats.

When George McGovern campaigned on giving every household $1,000, he was laughed out of town as a shameless panderer. President Obama is doing exactly the same – a one-year tax holiday that hands back about $1,000 per middle-class family – but with a little more subtlety.

Obama is also selling it as a job creator. This takes audacity. Even a one-year extension isn’t a tax cut; it’s a tax holiday. A two-month extension is nothing more than a long tax weekend. What employer is going to alter his hiring decisions – whose effects last years – in anticipation of a one-year tax holiday, let alone two months?

This is a $121 billion annual drain on the Treasury that makes a mockery of the Democrats’ reverence for the Social Security trust fund and its inviolability. Obama’s OMB director took Social Security completely off the table in debt-reduction talks under the pretense that Social Security is self-financing. This is pure fiction, because the Treasury supplies whatever shortfalls Social Security faces. But now, with the payroll tax holiday, the administration openly demonstrates bad faith – conceding with its actions that the payroll tax is, after all, interchangeable with other revenues and never actually sequestered to ensure future payments to retirees.

The House Republicans’ initial rejection of this two-month extension was therefore correct on principle and on policy. But this was absolutely the wrong place, the wrong time, to plant the flag. Once Senate Republicans overwhelmingly backed the temporary extension, that part of the fight was lost. Opposing it became kamikaze politics.

Note the toll it is already taking on Republicans. For three decades Republicans owned the tax issue. Today, Obama leads by five points, a 12-point swing since just early October. The payroll tax ploy has even affected his overall approval rating, now up five points in six weeks to 49 percent.

The Democrats set a trap and the Republicans walked right into it. By rejecting an ostensibly bipartisan “compromise,” the Republican House was portrayed as obstructionist and, even worse, heartless – willing to raise taxes on the middle class while resolutely opposing any tax increases on the rich.

House Republicans compounded this debacle by begging the Senate to come back and renegotiate the issue, thus entirely conceding the initiative to Majority Leader Harry Reid. But Reid had little incentive to make any concessions. House Republicans would have taken the fall for 160 million shrunken paychecks. Every day the White House would have demanded, in the name of the suffering middle class, that Republicans return from vacation and pass the temporary extension.

Having finally realized they had trapped themselves, House Republicans quickly caved, thanks to a fig leaf contrived by Sen. Mitch McConnell.

The GOP’s performance nicely reprises that scene in “Animal House” where the marching band turns into a blind alley and row after row of plumed morons plows into a brick wall, crumbling to the ground in an unceremonious heap.

With one difference: House Republicans are unplumed.

© 2011, The Washington Post Writers Group

Who We Are

The Patriot Post is a highly acclaimed weekday digest of news analysis, policy and opinion written from the heartland — as opposed to the MSM’s ubiquitous Beltway echo chambers — for grassroots leaders nationwide. More

What We Offer

On the Web

We provide solid conservative perspective on the most important issues, including analysis, opinion columns, headline summaries, memes, cartoons and much more.

Via Email

Choose our full-length Digest or our quick-reading Snapshot for a summary of important news. We also offer Cartoons & Memes on Monday and Alexander’s column on Wednesday.

Our Mission

The Patriot Post is steadfast in our mission to extend the endowment of Liberty to the next generation by advocating for individual rights and responsibilities, supporting the restoration of constitutional limits on government and the judiciary, and promoting free enterprise, national defense and traditional American values. We are a rock-solid conservative touchstone for the expanding ranks of grassroots Americans Patriots from all walks of life. Our mission and operation budgets are not financed by any political or special interest groups, and to protect our editorial integrity, we accept no advertising. We are sustained solely by you. Please support The Patriot Fund today!


The Patriot Post and Patriot Foundation Trust, in keeping with our Military Mission of Service to our uniformed service members and veterans, are proud to support and promote the National Medal of Honor Heritage Center, the Congressional Medal of Honor Society, both the Honoring the Sacrifice and Warrior Freedom Service Dogs aiding wounded veterans, the National Veterans Entrepreneurship Program, the Folds of Honor outreach, and Officer Christian Fellowship, the Air University Foundation, and Naval War College Foundation, and the Naval Aviation Museum Foundation. "Greater love has no one than this, to lay down one's life for his friends." (John 15:13)

★ PUBLIUS ★

“Our cause is noble; it is the cause of mankind!” —George Washington

Please join us in prayer for our nation — that righteous leaders would rise and prevail and we would be united as Americans. Pray also for the protection of our Military Patriots, Veterans, First Responders, and their families. Please lift up your Patriot team and our mission to support and defend our Republic's Founding Principle of Liberty, that the fires of freedom would be ignited in the hearts and minds of our countrymen.

The Patriot Post is protected speech, as enumerated in the First Amendment and enforced by the Second Amendment of the Constitution of the United States of America, in accordance with the endowed and unalienable Rights of All Mankind.

Copyright © 2024 The Patriot Post. All Rights Reserved.

The Patriot Post does not support Internet Explorer. We recommend installing the latest version of Microsoft Edge, Mozilla Firefox, or Google Chrome.