If politics is the art of the possible, congressional Republicans demonstrated a complete lack of artistry regarding extending the payroll tax holiday, turning what should have been a routine short-term compromise into an embarrassing cave-in.
The reduction in the Social Security payroll tax from 6.2 to 4.2 percent was scheduled to expire Dec. 31, along with extended unemployment benefits. A 27 percent cut in reimbursements to doctors who treat Medicare patients was also scheduled to take effect on this date. With typical Washington partisan gridlock, negotiations on long term extensions stalled. If nothing were done, this would have cost 160 million Americans about $1,000 a year in increased payroll taxes, ended unemployment benefits for 2.8 million people and forced a lot of doctors to refuse to take Medicare patients.
To prevent these hardships and promote economic growth, a $33 billion bipartisan compromise was reached in the Senate for two-month extensions in the payroll tax holiday and unemployment benefits, along with delaying the Medicare doctor fee cut. To accommodate Republicans, a provision requiring President Barack Obama to either approve or deny the environmentally disastrous Keystone XL oil pipeline within 60 days was added. The Senate approved the extension package by an 89-10 vote.
Normally, the House would have simply signed off on the extension package and gone home for the holidays. But Speaker John Boehner (R-OH) and Tea Party extremists instead wanted to push for a longer term deal more favorable to the wealthy interests they serve. On a 229-193 party-line vote, they called for a conference committee to work out longer term extensions, which was unrealistic in light of the Dec. 31 deadline and the holiday season. Only the now politically isolated House Republicans appointed committee members, and Boehner refused to put the extension to a floor vote, fearing that at least 26 Republicans would join the 192 Democrats to pass it.
This impasse made the Democrats look good on a tax issue, hurt Republicans at the polls, and finally forced Boehner to cave, with the extension package passing by a voice vote. When Congress returns in January, negotiations over longer term extensions will begin. If Obama wants to kill the Keystone XL pipeline, Republicans have now given him a perfect excuse by not allowing enough time for the thorough environmental review that is required.
We can now look forward to election year politics at its most cut-throat. The Republicans have damaged themselves by making it blatantly clear that they are only looking out for the richest one percent, and Obama is in a stronger position as he seeks re-election. According to the latest polls, he leads former Massachusetts Gov. Mitt Romney and Texas Rep. Ron Paul by seven points, and is 16 points ahead of former House Speaker Newt Gingrich. Happy New Year.