House Republicans appear to have caved in on the payroll tax cut extension, because they say they are willing to pass it without paying for it. While this seems to be a win for Democrats, I’m not so sure. There are things about this that do not satisfy me, because they leave a future minefield.
Republican leaders in the House of Representatives on Monday dropped their demand for spending reductions to pay for extending a tax cut for 160 million American workers, setting up a likely breakthrough for agreement with Democrats.
The about-face cleared the way for the Republican-led House to vote this week to renew for 10 months the tax cut set to expire on February 29.
The Democratic-led Senate would likely support the payroll tax extension as laid out by the Republicans, even though they prefer including in the deal provisions on jobless benefits and payments for doctors treating Medicare patients that Republicans now want to negotiate separately.
Notably, the offer was issued by both House Speaker John Boehner, the top Republican, and his deputy Eric Cantor, who has often taken a more hardline approach in budget negotiations with Democrats over the past year… [emphasis added]
Inserted from <Reuters>
Here are the problems. First, the Republican offer does not pay for the extensions. That means that either the Social Security Trust Fund will not be reimbursed, or it will be reimbursed out the general budget. The former weakens Social Security’s viability, giving Republicans a talking point. The latter ends the Democrats’ claim that Social Security is paid for exclusively by contributions, also giving Republicans a talking point. We need to pay for the extensions with a tiny income tax surcharge on people making over $1 million.
Second, it separates out unemployment benefits and Medicare’s ‘Doc Fix’. Unless these are included, Republicans maintain a hostage to use in more economic terrorism, especially leaving the unemployed out in the cold.
Ezra Klein and Brian Beutler are just as suspicious as I am.
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I certainly agree that Democrats must look this gift horse in the mouth, and modify it to include unemployment benefits and the ‘Doc Fix’.
7 Responses to “A Win for Democrats?”
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Remember the Trojan Horse and what it had hidden inside? Always look a gifthorse in the mouth!
“Second, it separates out unemployment benefits and Medicare’s ‘Doc Fix’. Unless these are included, Republicans maintain a hostage to use in more economic terrorism, especially leaving the unemployed out in the cold.”
I’m always suspecious of Republicans..
Amen Patty. What Richard said too.
I have learned to not trust a damm thing out of the repigs– They lie , cheat , and steal , They have no concern for this country– as they have demonstrated time after time–Trojan horse ? Yes — could well be—honest proposal ?/ Hell no- I do however think the Democrats have an advantage in this– I agree with you— modify to include unemployment and “Doc Fix”
Agree Phyllis. That’s what happened.
Today, I did the ‘budget’ article, a usually heavy subject (I’ve done my share at work and church), first because I had more energy and my back wasn’t bugging me. Now I wish I hadn’t.
I agree the Republicans lie, cheat, and steal six days til Sunday, and then twice on Sundays. It didn’t sound right, understanding Republicans, but I carried on. Part of my comment on ‘The Obama Budget’ article.
“point 1 : the Republicans appear to be caving on the expiry of the payroll tax cut; (they really did paint themselves into a corner with that one, no doubt about it!) obviously, they would rather add to the deficit than ask the wealthy to kick in their fair share; (can’t go back on their Norquist pledge, but they have no qualms about sticking it to the country!)”
I admit it, I forgot about the unemployment benefits that Republicans wanted to drop to 59 weeks from 79 weeks I believe and the 27% cut to doctors’ medicaid payments.
I do like Brian Beutler’s scenario that when the House passes the payroll tax cut and pushes it to the Senate, Senate Democrats need to add the other items, the unemployment benefits and ‘Doc Fix’ as they call it back onto the bill. The question is ‘Will the Republicans just say no’ and the Democrats just take the payroll tax cut, or will the Republicans approve the whole new package given that it is an election year? It will be interesting to watch.
Once the Republicans intentions were exposed by so many of us, they caved.