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Washington's Payroll Tax Mess

Washington dysfunction is on full display today, as the House of Representatives has voted to disapprove of the Senate's payroll tax compromise:


The House voted Tuesday to disagree with the Senate-passed payroll tax bill, and to call for a House-Senate conference to sort out differences between the bills. The move is intended to put pressure on Senate Democrats to reconvene and meet with the House over the bill, even as Democrats say the Senate is done for the year.  The move also raises the likelihood that workers will see their payroll taxes rise in January when the current tax cut expires. 

Democrats are convinced Republicans will get the blame if that happens because of their rejection of the Senate bill, while Republicans think it is Democrats who will be blamed for not working with the GOP on a deal to extend the break for a year.  As predicted by Republican leaders on Sunday, the motion to disagree with the Senate was approved with the support of nearly every Republican. The motion was passed 229-193, with only 7 Republicans voting against it and no Democrats supporting it.

No group is above reproach in this perverse, unnecessary melodrama.  Let's start with the shame of Republicans.  Speaker Boehner demanded that the Senate offer a bill of its own after the House passed its 1-year extension last week.  Senate leaders Harry Reid and Mitch McConnel forged a politically workable two-month compromise (which I argued was favorable toward Republicans), and passed it.  Boehner seemed to be satisfied for a short time, but soon faced an insurrection within his own House caucus.  Boehner's crew was upset with the deal.  It provided no certainty.  It kicked the can down the road for a few weeks, and would require another fight this coming winter.  And, as emerged yesterday, it was logistically infeasible to implement.  So House Republicans vowed to -- and now have -- rebuffed the deal that won overwhelming bipartisan support in the Senate.  But they didn't exactly defeat it.  No, sir.  As I reported last night, House leadership declined to bring the bill they'd once insisted upon up for a simple yes-or-no vote.  They were either nervous that they could lose the vote, or they thought it would look bad to directly cast votes against any form of the tax cut extension.  Instead, we saw a symbolic measure expressing disapproval of the Senate bill and calling for a conference committee.  Recapping: Either Congressional Republican leadership was not on the same page, or they did not accurately gauge the temperature of its House contingent.  In any case, they pulled a Reid-style, wimpy evasion to paper over their own missteps.  Pretty lame.


Which brings us to Congressional Democrats.  Pelosi's gang largely opposed the original House bill, which is standard operating procedure for the minority.  After caving on their destructive millionaires surtax plan and agreeing to include the House-passed Keystone XL language, Senate Democrats mostly voted for the Reid/McConnell deal.  This was all fine and dandy, but a funny thing happened on the way to the compromise: Senators neglected actual policy considerations.  So they passed a piece of legislation that literally cannot be implemented as written, according to non-partisan, policy-neutral experts.  That's the bad news.  The good news is that at least Members got to leave town for Christmas.  Nice trade-off, huh?  Once some House Republicans started pointing out the plan's flaws, Senators from both parties became indignant.  How dare the House scuttle a compromise bill.  Harumph, harumph, "consensus!"  Never mind that the "consensus" was based on an unworkable bill.  Democrats dug their heels in and refused to negotiate further in any form, as Reid/Pelosi ripped "tea party extremists" for derailing a mainstream, sensible bill (again, the bill that will not work).  They ignored the legislation's fatal flaws, as well as the inconvenient fact that President Obama -- and indeed many of their own colleagues -- had previously stated that nothing short of a full-year extension was acceptable...which is precisely what the House is still trying to accomplish.   They're also steadfastly refusing to participate in a conference committee to reconcile the two bills' differences, which is technically how Congress is designed to work when these sorts of differences arise.  Recapping: Democrats are passionately defending an unworkable bill that defies their own original goal of giving employers and employees a year of certainty, and that sets up yet another nasty slap fight with Republicans on the exact same issue before the NCAA tournament.  They say they have no interest in negotiating further, yet finger Republicans as the problem.


Finally, there's President Obama.  I don't think this guy cares one wit about the policy.  I think he wants to angle for any political advantage he possibly can and eventually claim victory.  His number one stated objective was to pass an extension of the payroll tax cuts (plus unemployment benefits and the doc fix) for one full year so American workers wouldn't see an increase in their taxes.  He was hoping Republicans would oppose it, so he could beat the hell out of them rhetorically for protecting the rich while hanging everyone else out to dry.  The GOP outflanked him, though, giving him what he wanted and attaching another popular program he detests (Keystone) as a supplement.  Defeated, he relented.  Once the Senate passed a compromise that violated his top-line goal, he's heard political opportunity knocking once again, and is currently lambasting the House for fighting for his own preferred time line.

Ladies and gentlemen, this is our federal government at work.  What a depressing spectacle.

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