The Corner

Why Conservatives Lost the Payroll Tax Cut Battle

This is ominous in more ways than one. House Republicans tried to insist that any extension of the payroll-tax cut (which lowers the rate from 6.2 percent to 4.2 percent) be offset by spending cuts elsewhere. This week the House leadership bowed to the inevitable and agreed to extend the payroll-tax cut for 10 months without offsetting spending cuts. But why was this inevitable?

The short answer is that the politics were terrible for Republicans. Democrats accused them of not caring about the middle class, etc., etc., and Americans by and large seemed to agree. House Speaker John Boehner, not one to shy from a good contest, evidently decided that this wasn’t going to turn out well, and saved his firepower for another battlefield.  

That may have been the wisest choice under the circumstances, but consider what’s really at stake. The payroll tax is a uniform (non-progressive) tax invented as a way for all American workers to pay into the Social Security and Medicare benefits that virtually all of them will be eligible for when they retire. What the Democrats want to accomplish with these endless extensions of the payroll-tax cut is to transform Social Security and Medicare into middle-class entitlements regardless whether anyone is paying their fair share into the pool. Just when we desperately need entitlement reform, the Democrats want to expand the entitlement state, driving the nation still more quickly down this road to perdition.

What’s even more ominous is that this national suicide attempt they’re advocating for appears to be great politics! As Tucker Carlson said at an ALEC speech in New Orleans last year, the problem here is very simply that “people like free stuff.” The Democrats have realized that they can cobble together winning electoral coalitions by offering the middle class a ton of free stuff. This is not a “safety net” for the poor and down-trodden, mind you. It’s more free stuff for people who already have more cars, TVs, and phones than they can afford. That’s the basic idea of the subsidies in Obamacare, which is just a huge new entitlement for the middle class, to be paid for by other people. There is no social justice in this: It’s a naked attempt to turn the federal government into a massive tool of extortion.   

Any extension in the payroll-tax cut without a spending cut offset is a travesty. In fact, we should have insisted that the extension be offset with entitlement reform, to make no mention of spending cuts. But we couldn’t. We didn’t have the public on our side. That’s why it would be wrong to blame Speaker Boehner for this defeat. The fault lies elsewhere.  

The Democrats’ bid to expand the entitlement state for political benefit is a mortal threat to the future of our country. But the fact that these collectivist schemes continue to play out in their favor is not the fault of conservative leaders. It is, rather, a sign that Americans have lost their way.  

We conservatives have to make a much more convincing case that the road to a better society lies in the direction of self-reliance and limited government, and away from the debilitating entitlement state to which the Democrats’ poisoned carrots are leading us.

— Mario Loyola is director of the Center for Tenth Amendment Studies at the Texas Public Policy Foundation.

Mario Loyola is a senior fellow at the Competitive Enterprise Institute, the director of the Environmental Finance and Risk Management Program of Florida International University, and a visiting fellow at the National Security Institute of George Mason University. The opinions expressed in this column are his alone.


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