Today's Payroll Tax Deal: What It Means, What Might Happen Next

I see that Congress has decided to do a two-month extension of the payroll tax holiday and unemployment benefits. The cost will be borne by Fannie Mae and Freddie Mac mortgage originators. And the key concession from the White House is to relent on language that forces them to make an expedited decision on the Keystone XL tar sands pipeline. The fascinating thing about that is that the White House has already said that if they are compelled to make a quick decision, they will reject the pipeline. So, you have the spectacle of the Republicans ostensibly going to the mat from the oil industry, but actually screwing them over. The White House issued the following statement after the deal was announced:


Statement by White House Communications Director Dan Pfeiffer

The President said that Congress cannot go home without preventing a tax increase on 160 million hardworking Americans, and the deal announced tonight meets that test. This is an important step towards enacting a key provision of the President’s American Jobs Act and a significant victory for the American people and the economy, because as independent analysts have said, failing to extend this tax cut would have had a damaging effect on our recovery and job growth. The President urges Congress now to finish up their business for the American people.

As for the pipeline, The Hill reports:


Boehner and Senate Republican Leader Mitch McConnell (Ky.) said they would not accept even a temporary extension of the payroll tax holiday without the Keystone language.

A senior White House official, however, said the president would not accept an attempt by Congress to mandate construction of the pipeline before there was an adequate review of health and safety regulations.

The official said the State Department has already said that if the review was shortened to 60 days as it is in this bill, it won't be able to conduct the necessary review.

So the pipeline will almost certainly not be approved, the official said, proving the entire process moot.



I have a problem with the word "moot." First, it used to mean "debatable" until Jesse Jackson went on Saturday Night Live and changed the meaning into something closer to "no longer relevant." That's the sense in whichThe Hill uses it. The language in the bill is unimportant (from the perspective of anyone who opposes the pipeline) because it won't create the pipeline. But, if the administration is to be believed, the language will actually kill the pipeline. If that's the case, it's hardly moot. We're about to watch the Republicans kill the pipeline by voting for it. Democrats who vote against the language will actually be making a failed attempt to save the pipeline.

So, one of two things is going on here. Either the Republicans are the worst allies in the history of legislative negotiations or the administration is lying and the Republicans are calling their bluff.

I don't think the answer to that question is moot. Or, maybe it is. I have no idea what that word means anymore.



Booman Tribune / By Booman | Sourced from

Posted at December 17, 2011, 4:28am

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