Now that Congress appears finally to have reached a compromise on what must be one of the worst pieces of legislation in years — the temporary payroll-tax-holiday extension — let’s survey the damage.
To begin with, what even minimally rational government enacts payroll-tax relief for just two months? As a matter of practicality alone, it makes no sense. The National Payroll Reporting Consortium, representing those who process paychecks, said of the two-month extension passed by the Senate just days before the new year: “There is insufficient lead time to accommodate the proposal,” because “many payroll systems are not likely to be able to make such a substantial programming change before January or even February,” thereby “creat[ing] substantial problems, confusion and costs.”
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The final compromise appears to tweak this a bit to make it less onerous for small business. But what were they thinking in the first place? What business operates two months at a time? The minimal time horizon for business is the quarter — three months. What genius came up with two? U.S. businesses would have to budget for two-thirds of a one-quarter tax-holiday extension. As if this government has not already heaped enough regulatory impediments and mindless uncertainties upon business.
But making economic sense is not the point. The tax-holiday extension — presumably to be negotiated next year into a 12-month extension — is the perfect campaign ploy: an election-year bribe that has the additional virtue of seizing the tax issue for the Democrats.
When George McGovern campaigned on giving every household $1,000, he was laughed out of town as a shameless panderer. President Obama is doing exactly the same — a one-year tax holiday that hands back about $1,000 per middle-class family — but with a little more subtlety. Obama is also selling it as a job creator. This takes audacity. Even a one-year extension isn’t a tax cut; it’s a tax holiday. A two-month extension is nothing more than a long tax weekend. What employer is going to alter his hiring decisions — whose effects last years — in anticipation of a one-year tax holiday, let alone one that lasts two months?
This is a $121 billion annual drain on the Treasury that makes a mockery of the Democrats’ reverence for the Social Security trust fund and its inviolability. Obama’s OMB director took Social Security completely off the table in debt-reduction talks under the pretense that Social Security is self-financing. This is pure fiction, because the Treasury supplies whatever shortfalls Social Security faces. But now, with the payroll-tax holiday, the administration openly demonstrates bad faith — conceding with its actions that the payroll tax is, after all, interchangeable with other revenues and never actually sequestered to ensure future payments to retirees.
The House Republicans’ initial rejection of this two-month extension was therefore correct on principle and on policy. But this was absolutely the wrong place, the wrong time, to plant the flag. Once Senate Republicans overwhelmingly backed the temporary extension, that part of the fight was lost. Opposing it became kamikaze politics.
Note the toll it is already taking on Republicans. For three decades Republicans owned the tax issue. Today, Obama leads by five points, a twelve-point swing since just early October. The payroll-tax ploy has even affected his overall approval rating, now up five points in six weeks to 49 percent.
Big whoop GDP growth was revised downward for the third quarter from 2% to 1.8%. Foreclosures are up too and that's hurting real people. While seasonal hiring is artificially making the job depression look slightly better coming early next year the layoffs that will occur will remind voters of how bad Obama really is. This was a blip much like Obama's boast "he got bin Laden."
We still own the tax issue and will even more so next year. Don't get your panties in a wad Jimmy Carter had good days in the late 70's too and people thought Democrats were better on the economy in 2006 and 2008.
Wait till the Obama foreign policy disaster hits the fan next year. Just another nail in his coffin.
And this is why we are Greece. This is why one day, some day, and sooner rather than later, it won't be the principled GOP or Tea Partiers who cave, it will be the country. And the MARKETS will be the ones on the other side. And they do NOT flinch.
That we have gotten to a point in this country where terrible policy, not just bad, but absolutely terrible goes forth because of the "optics" and because of how it politically plays is an utter and complete atrocity. Shame on them. Shame on the media. Shame on the idiotic 45% who still think Obama can lead and will fix the country.
Shame on McConnell having political sense but no principles. Shame on Boehner for just not being up to the challenges before him. The GOP needs a lot more in their Congressional leadership, even if they win the WH. No shame however on Reid, one doesn't expect anything less from him that what we see. Snakes always slither, and with Obama, they'll slither forward.
I do take issue however, with CK's attempt to use polling to put forth his point. Polls are so fickle and transitory as to be meaningless at this early point in the election cycle. Obama might be up because he's out of town, because folks are just happy at Christmas. Who knows why? But when a real person is at the other end of that stupid political mark, and when a real GOP candidate is across the teleprompter, we'll see how things work.
Obama has 10 months to further mess this up, drive businesses out, maximize suffering, despair, frustration, fear, loathing, and every other dysfunction modern societies have. Be patient, give him time. Where there's time, he'll fail.
The Mainstream Meatpackers, and Nancy Wasserreidosi have been droning on and on that this was all the fault of the "Tea Party Extremists". Any insight as to who in the leadership we should blame for this debacle?
I'm not buying it. Flash polls in the immediate aftermath of largely pro-Obama media influence, combined with a general knee-jerk tendency of citizens to favor any president over any Congress guarantees a short-term favorable result for the president. The election is almost a year away. No Democrat and no Republican is fooled by any of this, or swayed in the least. Every Republican understands Obama's scam here, and will only disdain him all the more for it. Every Democrat also understands the scam, and has been gleefully aware that the Democratic Party is a profoundly criminal organization for years and is quite proud of its effectiveness as such. The longer this scam is kept in the public consciousness, the better for Republicans, as its shameful nature becomes more apparent upon reflection. I doubt Independents will actually remember this at all a year from now.
Meanwhile, Republicans continue to hurt themselves by acting as if the Democrats have beaten them. The Republicans should get over the Stockholm Syndrome they have with respect to FDR. The Democrats are making their friends rich by tossing mere crumbs at the people to buy their votes, steal their freedom, and ruin their economic futures. We have all year to expose not only this scam but the entire Democratic con-game.
The problem with too many Republicans is that they do not act like they believe anything they are saying. They do believe it, but they think that "regular people don't get it". This is the "establishment" Republican problem in a nutshell.
Republicans, repeat after me: anyone who studied "political science" in a large university was brainwashed by a Communist professor. It's time to trash that nonsense and rewrite all the poli-sci textbooks. The Democrat political game only works because we Republicans also believe it works.
The Democrats have not been hiding their frustration at the fact that a large percentage of their base must pay fixed "Payroll Tax".
Their ultimate goal is remove the w2 income limit on fixed Payroll contributions and relieve the 47% who pay no Federal taxes of having to make a contribution at all.
They rage at how "regressive" the Payroll Tax is to their voters.
With that in mind: I think pundits on our side are looking at the politics of this matter with an eye towards gamesmanship. This is wrongheaded.
Anyone who thinks Obama is going to gain any advantage in an election year figting over payroll taxes every two months is dead wrong.
This incident shows what I have suspected all along. Boehner is incompetent.
Yesterday he was adamantly opposed to the short term extension because it was bad policy. The fundamentals of this situation have not changed since yesterday. This bill is just as bad policy as it was yesterday.
On the other hand if opposing this bill is not tactically the most effective way to achieve the Republicans' policy goals, he should not have fought this battle in the first place.
The fact that he adamantly opposed the bill yesterday, and supported it today, when the situation has not fundamentally changed, shows that Boehner's words mean nothing. This is political incompetence, plain and simple. House Republicans have caved and caved, time and time again.
I am starting to doubt if Boehner is up to the job of Speaker. Republicans would be well advised to consider looking for a more capable leader after the next election.
I grew up with the impression Republicans were the smart guys. If Obama and his advisers actually are the smartest guys in the room our future is wildly uncertain.
Happy Holidays, and please stop with your version of Christmas cheer, Dr. Krauthammer. You're hereby dis-invited to my party.
Obama is awful, as we all agree, and you're knocking Republicans for being human? Incredible! Why is it that when liberals "frame" the debate, Charles Krauthammer has also (to borrow a phrase) "fallen into President Obama's trap"?
Of course it was the wrong time (I'm sure you're paid well to make more subtle observations). Let's not relive it. Enough of this circular firing squad and mopy navel-gazing. Need we remind you that no matter what bad politics go on in Washington that Republicans (even out of power) get blamed for the whole shebang? Also remember that Obama's poll numbers have been rising mainly because he has been so relatively inactive lately--a present reality that next year's campaign won't allow him.
I'll no doubt hear about your very article from my local Democrat-pandering hack paper's liberal columnist and Marxist cartoonist for two weeks. Please print something that those bozos will ignore.
With republican economic voodoo logic. It is okay not to pay for tax cuts for the rich but you must pay and even object tax cuts for the middle class - Anonymous Democrat
That is the message the lay man will hear repeatedly in 2012. Can't wait for time to renew Bush tax cuts. Extremism loses all the time and Obama wins in 2012. The guy may not be a good leader but he sure knows how to play political chess.
Is it any wonder why congress is in such low esteem? They offer us a two month tax cut?! Good God the cost of implementing it is higher than the savings. The Republicans just totally caved. Now I know why the GOP is considered to be a bunch of blubbering little babies. They are weak, have no spine and no balls. If they are going to act like this, they should have never been elevated to the majority. They should be removed asap and replaced with Democrats. Hey at least then I would know what I was getting...
Why the hand-wringing and gnashing of teeth? It's Christmas time and the attention being paid to DC is minimal. Besides, isn't Boehner the guy that helped depose Gingrich the evil from his Leader spot? At least a Gingrich controlled GOP had a plan - that WORKED
Sometimes I wonder why I am a Republican. Are we just going to hand Obama the election? He is the worst President EVER and we are going to help re-elect him. Shame on us.
Paul Ryan, save us. We need a guaranteed win and you can make it happen.
Also. if we ever see Boehner try to run for President in the future, please take notes on what a dummy he has been for us.
It's unfortunate that most Americans don't know what Mr. Krauthammer knows and haven't the motivation to learn. Ignorance is the reason Democrats now own the tax issue and President Obama has risen in the polls. In politics, ignorance is bliss, Democrats figured that out long ago and have used it to their advantage ever since.
Republicans make no attempt to educate the American people. They make no plans, no provisions, to challenge the media narrative. Communication is a cornerstone of leadership. Republicans simply concede it to the media and Democrats. Their refusal to message is becoming a crisis for this nation.
Yes, and it's time for the wimps and RINOs to go en masse. Boehner should be relieved of duty by his district and dispatched. All we had to do was to point out that this would hasten SS demise. Obama wants a SS cut because 50% don't pay income tax and a cap gains tax cut is seen for the rich. And we let them get away with it.
Where is the tax reform discussion since Cain left? Oh, the powers that be conveniently moved the light off that subject.
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