Archive for Friday, December 23, 2011

Payroll tax deadlock ends as House caves

GOP drops demands over 2-month extension of cuts for workers

December 23, 2011

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— House Republicans on Thursday caved to demands by President Barack Obama, congressional Democrats and fellow Republicans for a short-term renewal of payroll tax cuts for all workers. The breakthrough almost certainly spares workers an average $20 a week tax increase Jan. 1.

After days of wrangling that even Speaker John Boehner acknowledged “may not have been politically the smartest thing in the world,” the Ohio Republican abruptly changed course and dropped demands for immediate holiday season talks with the Senate on a full-year measure that all sides said they want.

The House and Senate plan to act on the two-month extension today.

House Republicans were under fire from their constituents and GOP establishment figures incensed that they would risk losing the tax cut issue to Democrats at the dawn of the 2012 presidential and congressional election year.

“In the end House Republicans felt like they were re-enacting the Alamo, with no reinforcements and our friends shooting at us,” said Rep. Kevin Brady, R-Texas.

Boehner said he expects both House and Senate to pass a new bill by Christmas that would renew the tax break while congressional negotiators work out a one-year measure that would also extend jobless benefits for millions of Americans and prevent doctors from absorbing a big cut in Medicare payments.

The developments were a clear win for Obama. The payroll tax cut was the centerpiece of his three-month campaign-style drive for jobs legislation that seems to have contributed to an uptick in his poll numbers.

“Because of this agreement, every working American will keep his or her tax cut — about $1,000 for the average family,” Obama said in a statement. “That’s about $40 in every paycheck. And when Congress returns, I urge them to keep working to reach an agreement that will extend this tax cut and unemployment insurance for all of 2012 without drama or delay.”

If the cuts had expired as scheduled, 160 million workers would have seen a 2 percentage point increase in their Social Security taxes. And up to 2 million people without jobs for six months would start losing unemployment benefits averaging $300 a week.

The GOP retreat ends a tense standoff in which Boehner’s House Republicans came under great pressure to agree to the short-term extension passed by the Senate on Saturday. The speaker was initially open to the idea, but rank and file Republicans revolted and the House instead insisted on immediate talks.

The conflict arose after the Senate, on a bipartisan vote, passed legislation last week to extend for two months the payroll tax cut, jobless benefits and doctors’ Medicare fees that otherwise would have been cut 27 percent. The House had just days before passed a full-year extension that included a series of conservative policy prescriptions unpalatable to Obama and congressional Democrats.

Obama, Republicans and congressional Democrats all said they preferred a one-year extension but the politics of achieving that eluded them. All pledged to start working on that in January.

“Has this place become so dysfunctional that even when we agree to things we can’t do it?” Obama asked. “Enough is enough.”

The top Senate Republican, Mitch McConnell of Kentucky, was a driving force behind Thursday’s agreement, imploring Boehner to accept the deal that McConnell and Senate Democratic Leader Harry Reid had struck last week and passed with overwhelming support in both parties.

“There remain important differences between the parties on how to implement these policies, and it is critical that we protect middle-class families from a tax increase while we work them out,” Reid said after Boehner’s announcement.

The breakthrough emerged as a firewall erected by tea party-backed House Republicans crumbled Thursday.

“I don’t think that my constituents should have a tax increase because of Washington’s dysfunction,” said freshman Rep. Sean Duffy, R-Wis.

The Republican establishment, too, put new pressure on House Republicans to compromise.

The 2008 GOP presidential nominee, John McCain, former Bush administration confidant Karl Rove and The Wall Street Journal editorial page were among conservative voices urging House Republicans to retreat.

Kingston said the conference call lasted about three minutes, and Boehner did not give anyone time to respond.

Almost forgotten in the firestorm is that McConnell and Boehner had extracted a major victory last week, winning a provision that would require Obama to make a swift decision on whether to approve construction of the Keystone XL oil pipeline, which would bring Canadian oil to the U.S. and create thousands of construction jobs. To block the pipeline, Obama would have to declare that is not in the nation’s interest.

Obama wanted to put the decision off until after the 2012 election.

Comments

John Kyle 3 years, 8 months ago

Much the same way the above article sums up the mindless, spineless, corporate redumblican party

cato_the_elder 3 years, 8 months ago

But Barack is Captain Ahab, Queequeq.

Regards,

Ishmael

GardenMomma 3 years, 8 months ago

"Without drama and delay." That would be refreshing.

weeslicket 3 years, 8 months ago

from the article: The speaker was initially open to the idea, but rank and file Republicans revolted and the House instead insisted on immediate talks. (change rank and file to tea party, and you've got it right.) also: The breakthrough emerged as a firewall erected by tea party-backed House Republicans crumbled Thursday. and: House Republicans were under fire from their constituents and GOP establishment figures incensed that they would risk losing the tax cut issue to Democrats at the dawn of the 2012 presidential and congressional election year. and: “In the end House Republicans felt like they were re-enacting the Alamo, with no reinforcements and our friends shooting at us,” said Rep. Kevin Brady, R-Texas. and: The 2008 GOP presidential nominee, John McCain, former Bush administration confidant Karl Rove and The Wall Street Journal editorial page were among conservative voices urging House Republicans to retreat.

imo: one can only hope that this is a wake-up call to voters regarding the stubborn radicalism of the tea party worldview.

Cait McKnelly 3 years, 8 months ago

He makes too much money to qualify for Bert Nash. His "push Granny off a cliff" scree is in the same vein as Sarah Palin's "death panels". Scare the he!! out of old people to vote Republican.

jafs 3 years, 8 months ago

Why not create a job?

That's what those tax breaks are supposed to do, isn't it?

Carol Bowen 3 years, 8 months ago

The GOP is more worried about politics than people.

"House Republicans were under fire from their constituents and GOP establishment figures incensed that they would risk losing the tax cut issue to Democrats at the dawn of the 2012 presidential and congressional election year."

Fred Whitehead Jr. 3 years, 8 months ago

Finally, a victory against the Rush Limbaugh addled public. This later day facist radio personality has been inflicting his take on "conservatism" on lame brained people who passionately lap up his vile verbage cauculated to sell more ball hats, t-shirts and "newsletters. Limbaugh has nothing to do with sanity, ccivility, or common sense, yet normally reasonable poeple are flummoxed by his rants. Anybody ever studied Dr Joseph Goebbels? Read about it. Study it. The facists are not dead, they are trying to take over the country while all the time bleating about "taking back the country". Let's hope they never gain the support that happened in Germany in the 1930's

beatrice 3 years, 8 months ago

Well, good thing we won't have to deal with this again for another two whole months.

This is politics as usual and yet another story to file under "Why Americans Hate Congress." It was asinine for the Republicans to try and attach an agreement on going forward on the massive pipeline deal into the extension of this tax cut. Why are the Republicans trying to push this legislation on the pipeline through so quickly, without taking the time to truly study the potential shortfalls, economic and environmental? I'm glad Obama didn't completely cave to the Republicans on this one, but he only delayed the fight two months. That isn't exactly winning.

Did anyone notice front-runner Mitt Romney didn't want to voice an opinion on this? That isn't a good sign for a potential president.

The question remains, is the pipeline in our best interests or is it not?

beatrice 3 years, 8 months ago

Now we are talking. This is the real issue in all of this. I really don't have the knowledge about this pipeline to give a reasoned response. Thanks for yours.

deec 3 years, 8 months ago

There are a number of reasons to oppose Keystone. The water issue, of course, but there are others as well. The company that ran the first EIS also has Keystone as a major client, so the process is tainted. That's why another impartial study is needed. The portion of the pipeline that has been completed has had numerous leaks in the year or so it has been open. Keystone has used bully tactics, including threatening the use of eminent domain/condemnation, against ranchers and farmers whose land the proposed line would cross, if they didn't accept Keystone's lowball offers. Tar sands oil is hugely destructive to the environment in its production. http://wellcommons.com/groups/khi-new...

Scott Drummond 3 years, 8 months ago

So the "holier than thou" teabaggers are not quite so principled after all. Oh well, baggers, just consider this debacle good practice for your upcoming support for Mittens.

jafs 3 years, 8 months ago

If those are real questions, I'll try to answer them.

Some kinds of tax cuts are probably beneficial to the economy, specifically those like the payroll tax cut, which increases disposal income for those at the bottom and middle of the economic spectrum, because they're likely to spend it.

Others don't seem to be as beneficial, when they benefit those at the top.

Your hypothetical is odd - if somebody's poor, and votes for a candidate based on the promise they'll eliminate poverty, and they actually do, you don't think that person will continue to vote for that politician?

Satirical 3 years, 8 months ago

So, Obama initially asks for a 1 year extension of the Payroll Tax Cut. The Harry Reid lead Senate ignores Obama and passes a 2 month extension, then skips town. The Boehner lead House does what Obama asks for and works out a 1 year extension. Then Obama changes his mind and wants the two month extension, declines Boehners offer for a 1 year extension, and blames the Republicans for playing politics.

And yet people think it is the Republicans playing politics?

jafs 3 years, 8 months ago

Both sides are clearly playing politics.

Probably because of all of the other things they're adding to the bill.

I'd very much like to see single issue bills, rather than these jumbled messes we have now.

Obama's (and Democrats) objections to the one year extension had to do with those added items, not the length of the extension, in my view.

Carol Bowen 3 years, 8 months ago

You're forgetting that the house Republicans proposed a bill they knew would not be palatable just days before the two month agreement. The house Republicans never proposed an alternative to their stance. It appeared to me that they just wanted to continue the confrontation.

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