Tag Archives: payroll tax

Kindergarten politics

And by the title I don’t mean the politics of Kindergarteners (as vicious as those can be!), I mean when elected officials do thoroughly childish things and think we won’t see through them.  The latest example is President Obama’s grandstanding on House Republicans rejection of a 2-month payroll tax cut.

Does anyone seriously think that a two-month extension would have a significant effect on the economy?  Of course not.  This is a transparent game to make it look like the Republicans are trying to “raise taxes.”  The Democrats remember how pressuring President George H. Bush to raise taxes worked to get Clinton elected, so they strive to trick Republicans into raising taxes again.  Hopefully the Republicans will continue to see through the games and force the hands of Obama and the Senate to accept or a reject a longer term deal to keep the taxes down.

Unfortunately for the Democrats, now that they took the short-term populist approach of cutting payroll taxes it will be almost impossible to raise them again.  No Republican will want to oppose letting the cuts expire, even though it technically wouldn’t be a tax increase.

WASHINGTON (AP) — The House Tuesday rejected legislation to extend a payroll tax cut and jobless benefits for two months, drawing a swift rebuke from President Barack Obama that Republicans were threatening higher taxes on 160 million American workers on Jan. 1.

Obama said the two-month compromise is the only way to stop payroll taxes from going up by two percentage points.

“Now let’s be clear,” Obama said in a surprise appearance in the White House briefing room after the House vote. “The bipartisan compromise that was reached on Saturday is the only viable way to prevent a tax hike on January 1st. The only one.”

Uh, the only one except the case where the Senate and Obama agree to a longer period.

Obama said failure to pass the Senate version of the payroll tax cut extension could endanger the U.S. economic recovery, which he described as “fragile but moving in the right direction.”

Obama is gearing up to run for a second term in next November’s elections and there have been suggestions he will borrow a tactic from a past president and charge that a do-thing Congress is responsible for the country’s ills.

Another option would be to get involved and actually lead.

House Republicans controlling the chamber instead of a two-month extension want immediate negotiations with the Senate on a year-long plan. But the Senate’s top Democrat on Tuesday again ruled out talks until the House passes the stopgap measure.

“President Obama needs to call on Senate Democrats to go back into session … and resolve this bill as soon as possible,” said the Republican leader of the House, Speaker John Boehner. “I need the president to help out.”