NPR logo Payroll-Tax Stalemate Lets Democrats, GOP Underscore Key 2012 Messages

Payroll-Tax Stalemate Lets Democrats, GOP Underscore Key 2012 Messages

Sen. Mitch McConnell, Republican (left) and Sen. Harry Reid, Democrat, face off. hide caption

toggle caption

Sen. Mitch McConnell, Republican (left) and Sen. Harry Reid, Democrat, face off.

Another holiday season finds the nation dealing with a seasonal tradition that's becoming as routine as background Christmas music at retail establishments, the threat of a federal government shutdown and congressional Republicans and Democrats locked in stalemate as they each try to gain the political upper hand.

Where last year, it was the fight over extending the Bush-era tax cuts and unemployment insurance for the long-term jobless, this year, it's the extension of the payroll tax holiday (though unemployment benefits figure in the latest fight, too.)

The GOP-led House passed the payroll-tax cut extension sought by President Obama and congressional Democrats on Tuesday.

But the sticking point was House Republicans also passed a lot of things Democrats didn't want since Democrats wanted a clean payroll tax cut extension.

Instead, House Republicans attached a number of items to the bill, some meant to offset the cost of the extension (Tea Party and other conservatives insisted on that), others meant to advance the GOP agenda, all intended to continue the political combat between the parties.

Democrats objected to legislation requiring the Keystone XL energy pipeline project to begin apace. The Obama Administration has delayed the project to find the most environmentally friendly path for the pipeline. Democrats also objected to several ways Republicans proposed to pay for the lost payroll tax revenues — a further freeze on federal workers' pay, an increase in Medicare premiums and a reduction in the number of weeks jobless workers could claim unemployment insurance.

There was also a provision that would require the jobless insurance recipients to take drug tests.

Another bone of contention between Democrats and Republicans was the GOP refusal to offset the payroll tax cut extension by raising taxes on the nation's wealthiest households.

After passing on an 234-193 party line vote in the House Tuesday, the bill went to the Democratic Party-controlled Senate Wednesday where it was expected to be voted down.

But it didn't even get to a vote. Sen. Mitch McConnell, the Senate minority leader, refused to allow the bill to come to a Senate vote.

McConnell argued that he wanted the Senate to debate and vote on funding the government past Friday when the latest continuing resolution expires. If Congress doesn't approve legislation to extend federal government spending past Friday, the government faces another shutdown.

As NPR's David Welna reported for All Things Considered, there are some procedural matters at play as well. He reported:

The reality underlying all the political posturing is that Democrats really don't want the House to vote on a funding bill and then leave town. That would force the Senate to accept or reject the House version of the payroll tax cut extension; it can only be amended if the House is forced to stay in town.

For the public record, Reid said McConnell didn't want Republicans to have to vote because it was politically inconvenient.

"You think maybe they don't want to vote on it because the Republican senators are kind of embarrassed or ashamed about what's in the bill? I would think so," said Reid.

"Speaking of embarrassing is that we're doing an omnibus again," McConnell said, using jargon to describe the legislation needed to keep the government open past Friday.

"And the reason we're doing an omnibus again here on the eve of Christmas is because we haven't passed our appropriations bills," he said. "We've had almost as many show votes in the Senate this year, roughly an equal number of show votes. In other words, designed to fail, to go nowhere, to present a talking point for the president and his campaign."

If McConnell really believes that, it could offer another explanation for why he blocked the vote on the House bill. He has stated publicly his top priority is to see that Obama doesn't get re-elected. So anything Obama could possibly use to his political advantage McConnell, from his point of view, must try to stop.

McConnell is right that Democrats are framing issues for the upcoming elections. Of course, what he didn't say is that Republicans are doing the exact same thing.

Democrats want the payroll tax cut since it strengthens their argument that they are protecting the interests of the middle-class voters.

The payroll tax cut is part of the larger issue of income inequality that Obama has staked out as an issue for the 2012 presidential race. Whether Democrats win or lose on the payroll tax front, fighting for it is a key part of their message.

Democrats have also argued, with support from numerous economists, that it would damage the economy to withdraw spending power from consumers right now.

Republicans realize the symbolic power of the payroll-tax cut extension. Speaker John Boehner has told House Republicans that they have little choice but to pass such a cut since it's politically untenable not to.

But Republicans want to send some messages of their own. Tying the Keystone XL project to the payroll cut tax extension lets them argue that they are acting with more urgency than the president on job creation.

The project could create as many as 20,000 jobs by some Republican estimates. So the Democrats refusal to go along in the Senate and the president's threat to veto the legislation allows GOP lawmakers and presidntial candidates to keep up their steady stream of accusations that Obama has done more harm than good for the economy.

Another message that will certainly be welcomed by at least some of those whose taxes would go up if the Democrats had their way, is that Republicans didn't budge on that issue. There was no "millionaire's surtax" to pay for the payroll tax extension in their bill.