GOP’s Payroll Tax Fiasco

Nickles Not Pickles
Nickles Not Pickles

Wow, when even the notoriously extreme right-wingers who run the Wall Street editorial pages are annoyed with John Boehner’s Tea Party led revolt against the Republican members in the Senate, the GOP must really be in trouble. Pass me the popcorn!1

GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest.

The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play.

Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he’s spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible.

(click here to continue reading Review & Outlook: The GOP’s Payroll Tax Fiasco –

All Yesterday's Parties
All Yesterday’s Parties

except for the part where the WSJ is wrong:

A mostly irrelevant side note to the Wall Street Journal op-ed everyone’s talking about is that they don’t seem to know what policy they’re talking about.

“House Republicans yesterday voted down the Senate’s two-month extension of the two-percentage-point payroll tax holiday to 4.2% from 6.2%,” the editors wrote. “They say the short extension makes no economic sense, but then neither does a one-year extension. No employer is going to hire a worker based on such a small and temporary decrease in employment costs, as this year’s tax holiday has demonstrated.”

They seem to have their payroll tax cuts mixed up. The two percent holiday that’s been in effect for the past year, and the extension Congress is fighting about right now, are both to employees’ share of the Social Security FICA tax. The theory behind the policy is that by increasing worker take-home pay, the cut provides suffering consumers with additional purchasing power, and thus stimulates demand, which is exactly what this sluggish economy needs.

Earlier in the year, President Obama proposed broadening this tax cut to include the employer share of the Social Security FICA tax. That policy operates on the theory that reducing cost-per-employee will create the incentive for job creation. It’s a weaker theory — a lot of big employers are already sitting on a bunch of cash, but aren’t hiring because they don’t have enough customers (see above about demand). But this is what the Wall Street Journal’s editors seem to think has been going on all year — and they’re completely wrong.

(click here to continue reading Sidebar: Blistering Wall Street Journal Op-Ed Gets Payroll Tax Cut Wrong | TPMDC.)

  1. as the cliché goes []

Harry Reid says he will schedule vote on Ryan’s Republican budget plan

Veridis Quo

Wow, seems as if Senator Harry Reid might be doing something smart, for once.

Sam Stein has it from the horse’s mouth:

Senate Majority Leader Harry Reid (D-Nev.) announced on Wednesday that he would host a vote on Rep. Paul Ryan’s (R-Wis.) budget as a means of forcing moderate GOP senators to weigh in on the legislation’s controversial proposals. He did not provide a specific date for when that vote will take place. “There will be an opportunity in the Senate to vote on the Ryan budget to see if Republican senators like the Ryan budget as much as the House did,” Reid said on a conference call with reporters. “Without going into the Ryan budget we will see how much the Republicans like it here in the Senate.”

…This is really great news. First off, it’s simply great politics—it utterly puts the screws to the GOP. …

By forcing a roll call, this will put the GOP on record for years to come about their views on Medicare. And many Republican senators are caught between a rock and a hard place: Vote for it, and you invite a permanent barrage of ready-made attack ads; vote against it, and you risk getting teabagged to death. Olympia Snowe, for instance, already faces that conundrum, but this vote has the power to affect many more senators well past 2012.

And if Reid really wants emphasize the “hard” in hardball, he’ll schedule the vote after Nevada Rep. Dean Heller get elevated to the Senate by Gov. Brian Sandoval in a week or so. That would force Heller to be the one guy to vote for Ryan’s Republican budget twice—or wind up voting for it before he voted against it. Somehow I feel that neither of these is a winning move… which means that for us, putting this to a vote most certainly is.


(click here to continue reading Daily Kos: Harry Reid says he will schedule vote on Ryan’s Republican budget plan.)

This vote is smart for the Dems – especially because in 2008/2010 election cycles, many Republicans ran a fear mongering campaign directed at seniors, with the message being that Medicaid/Medicare was in danger, and only by voting Republican would it be saved from the meddling Dems. Ooopsie…

Process Matters Little to Voters

As Ezra Klein points out, the sausage making of legislation is not that interesting nor memorable to most of the country. Results are much more important than process.

Valleys outside of Neptune

Here are some things that happened on the night the GOP pushed the Medicare Prescription Drug Benefit through the House of Representatives:

A 15-minute vote was scheduled, and at the end of 15 minutes, the Democrats had won. The Republican leadership froze the clock for three hours while they desperately whipped defectors. This had never been done before. The closest was a 15-minute extension in 1987 that then-congressman Dick Cheney called “the most arrogant, heavy-handed abuse of power I’ve ever seen in the 10 years that I’ve been here.”

Tom DeLay bribed Rep. Nick Smith to vote for the legislation, using the political future of Smith’s son for leverage. DeLay was later reprimanded by the House Ethics Committee.

The leadership told Rep. Jim DeMint that they would cut off funding for his Senate race in South Carolina if he didn’t vote for the bill.

The chief actuary of Medicare, Rick Foster, had scored the legislation as costing more than $500 billion. The Bush administration suppressed his report, in a move the Government Accounting Office later judged “illegal.”

Rep. Jo Ann Emerson, a “no” vote, spent the night “hiding on the Democratic side of the floor, crouching down to avoid eye contact with the Republican search team.”

Rep. Butch Otter, who provided one of the final votes after hours of arm-twisting from the Republican leadership, said, “I thought there was a chance I would get sick on the floor.”

Remember all this? Probably not. There wasn’t much reporting on it at the time. It wasn’t a major controversy, despite resulting in multiple official investigations.

[Click to continue reading Ezra Klein – Lessons from the Medicare Prescription Drug Benefit vote ]

Bottom line, Democrats currently have a majority in both House and Senate, so they should use this majority to pass health care reform. By 2012, hardly anyone will care how the bill got passed, just that it became law1.

  1. or it didn’t. The Democratic leadership has shown, time and time again, they lack the ruthlessness of the Republican leaders []

Reading Around on January 10th through January 17th

A few interesting links collected January 10th through January 17th:

  • New York Times Ready to Charge Online Readers — Daily Intel – The argument for remaining free was based on the belief that is growing into an English-language global newspaper of record, with a vast audience — 20 million unique readers — that, Nisenholtz and others believed, would prove lucrative as web advertising matured. (The homepage, for example, has sold out on numerous occasions in the past year.) As other papers failed to survive the massive migration to the web, the Times would be the last man standing and emerge with even more readers. Going paid would capture more circulation revenue, but risk losing significant traffic and with it ad dollars.
  • The Climate Killers : Rolling Stone – The Climate Killers Meet the 17 polluters and deniers who are derailing efforts to curb global warming: Warren Buffett
    Rupert Murdoch
    Jack Gerard, President, American Petroleum
    Rex Tillerson, CEO, ExxonMobil
    Sen. Mary Landrieu, Democrat, Louisiana
    Marc Morano, Founder, Climate Depot
    Sen. James Inhofe, Republican, Oklahoma
    David Ratcliffe, CEO, Southern Company
    Dick Gephardt, CEO, Gephardt Group
    George Will, Commentator, ABC
    Tom Donohue, President, U.S. Chamber of Commerce
    Don Blankenship, CEO, Massey Energy
    Hack Scientist, Fred Singer, Retired physicist, University of Virginia
    Sen. John McCain, Republican, Arizona
    Rep. Joe Barton, Republican, Texas
    Charles and David Koch, CEO and Executive Vice President, Koch Industries
  • Everything That Ever Happens Is Good News For The Republicans, Corporate Media Insists – In the Senate, two Democrats will retire but six Republicans will join them. In the House, GOP retirements outpace Democrats 14 to 10.