The Convoluted Nature of the GOP's Tax-Cut Demands
About a week ago, the conventional wisdom was that extending the payroll tax cut through 2012, as President Obama wants, wouldn’t pose too tough a challenge. The party leadership in both parties and both chambers had endorsed the goal, and the debate was over how to pay for the policy, not whether the policy was worthwhile.
But Republicans quickly discovered a problem. In the Senate, most of the GOP caucus was so reluctant to approve the tax break, they voted against their own party’s plan. In the House, the gap between the leadership and the rank-and-file members was surprisingly wide.
Deep rifts among House Republicans over a payroll tax break became evident Friday as rank-and-file members of the caucus told their leaders that they did not want to extend the cut in Social Security taxes for another year, as demanded by President Obama.
Given the effort Democrats are making to capitalize on the issue, Speaker John A. Boehner warned Republicans they would run political risks and could be accused of allowing a tax increase if they blocked the continuation of payroll tax relief set to expire at the end of the year. Lawmakers coming out of the caucus meeting Friday said they had had a spirited debate.
“Most people standing up to speak were troubled” by legislation to extend the payroll tax cut, said Representative Jeff Flake, Republican of Arizona. “There was a divide between the rank and file and the leadership. There was a lot of disquiet in that room.”
The political world has come to accept a basic truism: the Republican Party is, above all else, an anti-tax party. GOP officials always want to cut taxes, regardless of merit or circumstances.
The maxim is incomplete — Republicans love tax cuts, but their affection is limited to cuts for the very wealthy. An extension of the payroll break largely benefits the middle class, and that immediately gives the GOP pause.
Indeed, the very debate has tied Republicans in knots. They want to cut taxes, except for these taxes. They don’t believe tax cuts should be paid for, except these tax cuts must be paid for. They believe tax breaks always work to benefit the economy, except these tax breaks don’t do much of anything, no matter what economists say. They believe letting tax cuts expire counts as a tax increase, except these tax cuts, which don’t.
As of Friday, we’re looking at a new, almost-amusing scenario in which Republican lawmakers want some kind of sweetener to vote for a tax cut.
And what, pray tell, does the GOP want as a ransom? Republican leaders are apparently asking for “proposals easing air pollution standards for industrial boilers and clearing the way for construction of the Keystone XL oil pipeline from Alberta, Canada, to refineries along the Gulf Coast of Texas.” If Dems balk, the payroll break expires, and the economy likely gets worse.
For their part, Senate Democratic leaders are reportedly crafting a compromise plan— which, presumably, would not include a surtax on millionaires and billionaires — to be presented today.