House Speaker John Boehner announced on Thursday that the GOP has struck a deal with Senate Democratic leader Harry Reid to extend the payroll tax cut for two months.
The same deal was met just one week earlier with opposition from House Republicans who wanted a one-year extension to be offered. Originally passed with bipartisan support by Senate members it took a week of negotiations for House Republicans to prepare for the passage of the bill which extends Jan. 1 tax cuts for working class Americans.
After President Obama demanded that the bill be passed GOP members continued to negotiate with House Democrats while Boehner revealed:
“We will ask the House and Senate to approve this agreement by unanimous consent before Christmas.”
Such a move would allow chamber members to pass the bill without objection, allowing them to remain at home with their families rather than returning to Washington over the holidays for an emergency vote over the holiday recess.
The agreement comes hours after Boehner rejected a call from Senate Minority Leader Mitch McConnell, (R-Kentucky) to craft a short-term extension. During his rejection Boehner asked that a one-year tax cut extension be accepted, a deal that was becoming increasingly hard to navigate.
McConnell released the following statement:
“House Republicans sensibly want greater certainty about the duration of these provisions, while Senate Democrats want more time to negotiate the terms,” and “These goals are not mutually exclusive. We can and should do both.”
Under the current tax cut schedule the average American worker saves $1,000 per year, approximately $40 per paycheck. Under th current plan cut taxes are levied at 6% instead of 6.2% while long-term benefit users would have also seen their monthly benefits drop.
In an op-ed piece in the Wall Street Journal this week the paper observed that House Republicans had lost the political advantage they once held over Obama and the Democrats when it comes to advocating tax cuts. The paper’s editors said the GOP has:
“Achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter.”
“At this stage, Republicans would do best to cut their losses and find a way to extend the payroll holiday quickly.”
While Boehner may have agreed to the two-month extension he also noted:
“We can do better … It’s time for us to sit down and have a serious negotiation and solve this problem.”
Before the agreement was reached President Obama met with various middle-class Americans at the White House on Thursday to demonstrate how much the quickly vanishing American middle-class needs the tax holiday to extend past December 31
In his address President Obama told those in attendance:
“It’s time for the House to listen … to the voices all across the country and reconsider,” and “I am ready to sign that (Senate) compromise into law the second it lands on my desk.”
“So far, the only reason it hasn’t landed on my desk … is because a faction of House Republicans have refused to support this compromise,” the president added. “Has this place become so dysfunctional that even when people agree to things we can’t do it? It doesn’t make any sense.”
The Payroll Tax Cut also arrived alongside other tied-in issues including an extension to emergency federal unemployment benefits and the “doc fix” which would provide a delay in scheduled pay cuts to Medicare physicians.
While top Democrats and Republicans agree on the need for a one-year tax cut they simply haven’t reached agreement on how they will pay for those extended cuts.
Passing the bill was also important for the GOP as it’s largely believed President Obama will use the new election cycle to copy Harry Truman’s 1948 campaign in which he railed out against an unpopular and often dysfunctional Congress that was also controlled by the GOP and was unable to reach resolve on most issues.
In pouncing on the Republican base House Minority Whip Steny Hoyer said on Thursday:
“Republicans have been arguing about process and politics … The stakes are too high to be arguing about politics and process. The Republican contention that the two-month compromise somehow is unworkable is simply untrue.”
It should be noted the this isn’t the first time that the George W. Bush implemented tax cuts have been met with gridlock, Washington politicians experienced a similar situation in 2010 when discussing the renewal of the tax cuts.
The biggest potential losers from GOP fallout are of course the 2012 Presidential hopefuls who took vastly different approaches to addressing the issue on Thursday with Mitt Romney providing the standard political answer of providing insight after the fact:
“My own view is had I been president, I would have been working with the leaders in both parties to see if there’s not a way to reach common ground. My assessment of the circumstances is that there is common ground to reach in this matter. This should have been dealt with some time ago.”
Newt Gingrich didn’t offer much in terms of solution either, noting:
“Incumbent presidents have enormous advantages. And I think what Republicans ought to do is what’s right for America,” Gingrich said. “They ought to do it calmly and pleasantly and happily.”
At this point any deal that is struck will now look like the hard work and determination of President Obama’s administration who pushed for more time with a guaranteed two month extension. Even if GOP members are instrumental in the creation of a new extension that allows for the Payroll tax cuts to run through all of 2012 it will have been the Democrats who first pushed for more time to allow for a better deal.
Even a weaker agreement than originally proposed by the House GOP based will still look as if the Democrats pushed for something instead of nothing, no small feat during an election year that saw worries over the economy mounting against President Obama and his fellow Dems.
Do you think the GOP has shot themselves in the foot by playing into the Democratic parties tax-cut demands directly before an election cycle? How would you propose that the Republican party react in order to turn the tides of their own mucked up decision?