Not for good, naturally -- we'll be seeing plenty of class warfare in the months ahead -- but they're throwing in the towel in the latest skirmish: The payroll tax fight. This round goes to the GOP:
Democrats backed away from their demand for higher taxes on millionaires as part of legislation to extend Social Security tax cuts for most Americans on Wednesday as Congress struggled to clear critical year-end bills without triggering a partial government shutdown. But Republicans, frustrated that a bipartisan $1 trillion funding bill was being blocked by Senate Democrats, floated the possibility of repackaging the measure and passing it Friday in defiance of President Barack Obama and his allies in control of the Senate. Stopgap funding runs out Friday at midnight.
At issue now are three year-end bills that Obama and leaders in both parties in Congress say they want. One would extend expiring Social Security payroll tax cuts and benefits for the long-term unemployed, provisions at the heart of Obama’s jobs program. Another is the $1 trillion spending measure that would lock in cuts that Republicans won earlier in the year. The third measure is a $662 billion defense bill setting policy for military personnel, weapons systems and the wars in Iraq and Afghanistan, plus national security programs in the Energy Department. After a two-day silence, the White House said Obama would sign the measure despite initial concern over a provision requiring military custody of certain terror suspects linked to al-Qaida or its affiliates. U.S. citizens would be exempt.
Simply put, Obama raised the stakes on this, House Republicans called his bluff, and flat out-maneuvered Democrats in the process. Also, take special note that the president agreed to sign a Defense Authorization bill that requires military detention (and permits indefinite detention) of enemy combatants -- discarding a previous veto threat. Congress had approved these measures overwhelmingly; another vindication of Bush counter-terrorism policy. Not bad for a few days' work, I'd say. I'll leave you with two clips that help explain yesterday's Democratic capitulation. The first features Senate Republican Leader Mitch McConnell blasting hapless Harry Reid on the Senate floor for coordinating an endless series of empty "show votes," while dithering and ducking his actual governing responsibilities. Coupled with Boehner's thrown gauntlet yesterday, Democrats found themselves in an old-fashioned political bind:
The second clip is of faux-moderate Democratic Senator Claire McCaskill urging her party's leader to get off his ass and actually try to accomplish something. She's not alone. Other endangered Democrats have also started chirping about Reid's partisan insolence in an attempt to seem "independent," or whatever. It's self-preserving grandstanding, and shouldn't be trusted, but it's still fun to watch:
Because of statements like that, Republicans are turning up the heat on the Keystone XL project. Will the president really oppose a true job-creating initiative that will open a new domestic energy spigot via a friendly nation because he's beholden to the environmentalist Left? In doing so, is he willing to cross the dozens of Democrats who've supported this project on the record?
Mr. Reid's surcharge—which would hit incomes of $1 million and above—would slam small business job creators. Congress's Joint Committee on Taxation estimates that taxpayers will declare about $1.2 trillion of business income in 2013. Only a fraction of those small business owners and Subchapter S companies will have a net income above $1 million, but Joint Tax finds that 34% of that $1.2 trillion is on tax returns with "modified AGI [adjusted gross income] in excess of $1 million." This means about $400 billion of business income would be subject to Mr. Reid's profits surtax.
Mr. Obama's own Treasury Department examined 2007 IRS data and found 392,000 returns with incomes above $1 million. Some 311,00, or more than three out of four, were classified by Treasury as "business owners." Perhaps Democrats can explain how taking money from employers is going to lead them to hire more workers.
Meanwhile, Dems are so proud of Reid's remark, they're fundraising off of it.
Guy Benson is Townhall.com's Political Editor. Follow him on Twitter @guypbenson. He is co-authors with Mary Katharine Ham for their new book End of Discussion: How the Left's Outrage Industry Shuts Down Debate, Manipulates Voters, and Makes America Less Free (and Fun).
Author Photo credit: Jensen Sutta Photography
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