At the end of this year, the payroll tax cut, which reduced the payroll tax from 6.5 percent to 4.5 percent, is set to expire unless legislation is passed to extend it. For the average American family, the expiration of this payroll tax reduction would mean a tax increase of between $1,000 and $1,500 annually.
Two months ago, President Obama offered a bill to extend the tax cut and the unemployment benefit extension through 2012. The President said at the time that given the fact that the economy is fragile, it would be poor public policy to increase taxes on those who could least afford it. He asked for a “clean” bill, meaning an extension of the payroll tax cut and unemployment benefits without additional measures added on to it.
The negotiators on the Republican side, Senate Minority Leader Mitch McConnell and Speaker John Boehner, immediately said that they would add on the requirement that the Obama administration render a final decision on an oil pipeline that an oil company wants badly.
The proposed pipeline would cross the Ogallala aquifer in Nebraska. This aquifer provides irrigation for many prairie states across the Great Plains. Many farms in these states would cease to exist if anything happened to this aquifer.
For this reason Nebraska Democrats and Republicans alike are opposed to the location of this proposed pipeline. The Republicans inserted it into the bill as a “poison pill” under the theory that the President would have to either offend the people who live on the plains or offend labor.
Initially, the President reiterated that he wanted a clean bill and even went so far as to threaten to veto a bill with add-ons. However, after negotiations with McConnell, the President reluctantly compromised by agreeing to allow the requirement for an early decision on the pipeline into the bill and agreeing that he would still sign it. He refused a number of “Tea Party” add-ons, such as mandatory drug testing of people who qualify for unemployment benefits. Then the question arose about how to “pay for” the continued payroll tax cut. Democrats proposed a 1.9 percent surtax on income over $1 million. The Republicans absolutely refused to consider that millionaires and billionaires take even this small step towards beginning to pay their fair share. Instead, they wanted to cut programs that they don’t like. A compromise was proposed whereby a two-month extension was agreed to in order to allow for more time for the two sides to work on an extension for the whole year. McConnell agreed, and was videotaped giving a “high-five” to another Republican Senator as he left the conference room. Speaker of the House John Boehner said on television last Saturday (Dec. 17) that he thought it was a good bill.
Then the corporate funded “Tea Party” extremists in the House rebelled against the tax cut. Boehner knew from previous experience that Congressman Eric Cantor (who is the majority leader and covets Boehner’s job) would take the “Tea Party” side of the issue, and if Boehner didn’t take the “Tea Party” side, Cantor would try to use the issue as an excuse to wrest the Speaker’s job from Boehner. Therefore, Boehner had to do a u-turn as a matter of survival as Speaker of the House. Boehner’s situation was further complicated by the fact that between 60 and 70 Republican representatives would vote for the Senate bill (which passed the Senate with 89 votes, 39 Republican Senators voting for it). Boehner’s solution was not to allow a vote on the bill that passed the Senate and to force a vote this afternoon (Dec. 20) on a “Tea Party” bill that has no chance of passage in the Senate. The bill passed the House with 226 votes. Boehner then held a press conference in which he said he wanted to re-negotiate what he and McConnell had agreed to with Majority Leader Reid. For once in his life, Reid showed some backbone and told Boehner that he would be happy to negotiate a one year deal after the House passed the Senate bill. The President entered the fray this afternoon (Dec. 20) stating that the Republicans should quit playing games and vote on the Senate bill. We live in interesting times.
While meeting among themselves, the House Republicans compared themselves to characters in the movie “Braveheart.” It is said that when they were meeting among themselves a few months ago (when they were trying to cause the United States to default), they were comparing themselves to characters in the movie “The Town.”
What they actually resemble are the characters in any of the “Monty Python” movies of the 1970’s and 1980’s. They need to spend less time watching movies and spend some time finding out what is happening in the real world.
Postscript: After the Wall Street Journal, 9 Republican Senators (including Senator McCain) and the President admonished the “Tea Party” Republicans in the House to grow up and do their jobs, the “Tea Party” members have backed down. They just might, maybe, have learned something, but probably not. We’ll see if they have when the two-month extension runs out.
Paul Schwietering is a former Democratic state central committeeman. He lives in Union Township.