The payroll tax expiration fight thread.

[Thiebear]

does this seem like a simple thing for Business' to accept for this 2 month plan?

For example, a CEO earning $55,050 a month would reach the $110,100 cutoff by March. As a result, the executive would pay only 4.2 percent in payroll taxes for the year.

By contrast, a middle manager earning $120,000 in yearly salary would pay a 4.2 percent rate on the first $20,000 earned in January and February and a 6.2 percent rate on the $100,000 in income earned subsequently from March through December.

To eliminate this disparity, aides to Senate Majority Leader Harry (Reid) and Senate Finance Committee Chairman Max Baucus (Mont.) insisted on creating a new Social Security taxable wage limit of $18,350, according to a congressional source familiar with Senate negotiations.

Senate Republican Leader Mitch McConnell (Ky.) raised concern about the provision but did not block it because negotiations were moving so swiftly, said the source.

The provision would require people earning more than $18,350 in the first two months of 2012 to pay a 6.2 percent payroll tax rate on income over that threshold.

Isberg says there is not enough time for payroll processing companies to reconfigure their software to identify the income earners who surpass that limit and automatically kick them up to a higher rate.

http://thehill.com/homenews/senate/200607-ex-bush-official-involved-in-pushing-payroll-tax-letter-touted-by-gop

That 18,350 income bracket wasn't discussed and the bill was passed. = Good Job on this new mess.

We should hire 10k people to fix it and call this bill a job creator

[Larry]

does this seem like a simple thing for Business' to accept for this 2 month plan?

That 18,350 income bracket wasn't discussed and the bill was passed. = Good Job on this new mess.

We should hire 10k people to fix it and call this bill a job creator

Observing that the only reason such a rule is needed, is because of the two-month time frame.

(Which, I'll agree in advance, doesn't make it a Good Thing.)

[@DCGoldPants]

When some of your biggest backers say you f'd this up.....you probably f'd this up.

WSJ Editorial Board - The GOP's Payroll Tax Fiasco

GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest.

The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play.

Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he's spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible.

House Republicans yesterday voted down the Senate's two-month extension of the two-percentage-point payroll tax holiday to 4.2% from 6.2%. They say the short extension makes no economic sense, but then neither does a one-year extension. No employer is going to hire a worker based on such a small and temporary decrease in employment costs, as this year's tax holiday has demonstrated. The entire exercise is political, but Republicans have thoroughly botched the politics.

More from the link.

[Larry]

Oh, I don't think either side has exactly come out as winners on this fight.

Nor do I think it's likely that either side will. (Although there's still plenty of time for both sides to attempt to create a fictional story. Something which I think we all agree that one side is better at than the other.)

[twa]

When some of your biggest backers say you f'd this up.....you probably f'd this up.

More from the link.

Does the idiot WSJ writer not realize employer costs are unchanged with or w/o this bill?

the company itself still pays 6.2% as it's share,and has nothing but another headache either way

[Thiebear]

If we don't pass it till Feb when they get back from vacation that means we will have to pay 2% of 1 month to the social security fund and Medicare?

If we do pass this, we will have to fix all payroll and create a tax bracket ?

This is like Congress changing the Daylight savings time and creating billions in work / patches for computers.

[Fergasun]

thiebear,

You do realize the "2-month extension" is just as gimmicky as the "1-year extension".

You do recall that at some point in the recent past, the GOP was claiming that tax cut's didn't have to be paid for; I believe the phrase was "tax cuts pay for themselves".

You do realize that in order to "pass the budget", the GOP would have to agree to pass the budget as well, and the GOP has enough Senators to continue to block the Democrats from passing anything, which by default keeps spending at the FY10 baseline (this is just the realization that even though the GOP has called for using FY08 as the floor, they don't have the votes to do that, but they have sufficient votes to keep spending from increasing).

In my mind, the optics of recent fighting in Congress suck for the GOP.

1) The 1-year tax cut could get paid for by taxing millionaires. The GOP rejected this.

2) The 2-month tax cut is paid for by increasing Fannie/Freddie fees. Who does this impact most? The middle class.

3) GOP proposals to pay for the 1-year tax cut were paid for by cuts to Federal employee benefits, and a pay-freeze. Federal employees are certainly middle class.

4) In order to get a 12-month extension, you need through the first 2-months. The GOP doesn't even want to get that first 2-month extension.

In short, the GOP proposes to redistribute the wealth of middle class folks, to other middle class folks, while blocking any attempt to redistribute the wealth of the rich. I guess the middle class doesn't "create jobs". Additionally, the GOP is blocking the easiest way to get some extension of the payroll-tax cut. I don't understand how the GOP gets away with this type of BS, other than they are willing to go out and lie a whole lot more.

---------- Post added December-21st-2011 at 07:31 AM ----------

thiebear,

Giving that the 1-year extension was going to end; companies would've had to plan for this anyway. All this does is push back their implementation down another 2-months.

Or did you not get the news that the scare-letter talking about the payroll tax headache was written by someone who worked in the Treasury department while under Bush (ie. it was GOP BS).

Once there was a "temporary" cut in place, at some point it could/would expire. For some reason, I don't know why, maybe it was because this assumption makes one party look bad; but that letter assumed a baseline of a 1-year tax extension, versus the payroll tax-cuts expiring now. In which case the letter would say "Our companies need the extra 2-months to prepare for the end of the payroll tax extension."

[Duckus]

When the Wall Street Journal Op-Ed section starts trashing the GOP and Tea Party and calls their plan a "fiasco", you know things have gotten off track for conservatives.

The GOP's Payroll Tax Fiasco

How did Republicans manage to lose the tax issue to Obama?

GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest.

The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play.

Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he's spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible.

House Republicans yesterday voted down the Senate's two-month extension of the two-percentage-point payroll tax holiday to 4.2% from 6.2%. They say the short extension makes no economic sense, but then neither does a one-year extension. No employer is going to hire a worker based on such a small and temporary decrease in employment costs, as this year's tax holiday has demonstrated. The entire exercise is political, but Republicans have thoroughly botched the politics.

Their first mistake was adopting the President's language that he is proposing a tax cut rather than calling it a temporary tax holiday. People will understand the difference—and discount the benefit.

Republicans also failed to put together a unified House and Senate strategy. The House passed a one-year extension last week that included spending cuts to offset the $120 billion or so in lost revenue, such as a one-year freeze on raises for federal employees. Then Mr. McConnell agreed with Senate Majority Leader Harry Reid on the two-month extension financed by higher fees on Fannie Mae and Freddie Mac (meaning on mortgage borrowers), among other things. It passed with 89 votes and all but seven Republicans.

Senate Republicans say Mr. Boehner had signed off on the two-month extension, but House Members revolted over the weekend and so the Speaker flipped within 24 hours. Mr. Boehner is now demanding that Mr. Reid name conferees for a House-Senate conference on the payroll tax bills. But Mr. Reid and the White House are having too much fun blaming Republicans for "raising taxes on the middle class" as of January 1. Don't be surprised if they stretch this out to the State of the Union, when Mr. Obama will have a national audience to capture the tax issue.

If Republicans didn't want to extend the payroll tax cut on the merits, then they should have put together a strategy and the arguments for defeating it and explained why.

But if they knew they would eventually pass it, as most of them surely believed, then they had one of two choices. Either pass it quickly and at least take some political credit for it.

Or agree on a strategy to get something in return for passing it, which would mean focusing on a couple of popular policies that would put Mr. Obama and Democrats on the political spot. They finally did that last week by attaching a provision that requires Mr. Obama to make a decision on the Keystone XL pipeline within 60 days, and the President grumbled but has agreed to sign it.

Senate Minority Leader Mitch McConnell speaks at a news conference as House Speaker John Boehner listens.

But now Republicans are drowning out that victory in the sounds of their circular firing squad. Already four GOP Senators have rejected the House position, and the political rout will only get worse.

One reason for the revolt of House backbenchers is the accumulated frustration over a year of political disappointment. Their high point was the Paul Ryan budget in the spring that set the terms of debate and forced Mr. Obama to adopt at least the rhetoric of budget reform and spending cuts.

But then Messrs. Boehner and McConnell were gulled into going behind closed doors with the President, who dragged out negotiations and later emerged to sandbag them with his blame-the-GOP and soak-the-rich re-election strategy. Any difference between the parties on taxes and spending has been blurred in the interim.

After a year of the tea party House, Mr. Obama and Senate Democrats have had to make no major policy concessions beyond extending the Bush tax rates for two years. Mr. Obama is in a stronger re-election position today than he was a year ago, and the chances of Mr. McConnell becoming Majority Leader in 2013 are declining.

At this stage, Republicans would do best to cut their losses and find a way to extend the payroll holiday quickly. Then go home and return in January with a united House-Senate strategy that forces Democrats to make specific policy choices that highlight the differences between the parties on spending, taxes and regulation. Wisconsin freshman Senator Ron Johnson has been floating a useful agenda for such a strategy. The alternative is more chaotic retreat and the return of all-Democratic rule

http://online.wsj.com/article/SB10001424052970204791104577110573867064702.html?fb_ref=wsj_share_FB&fb_source=timeline

[@DCGoldPants]

Oh, I don't think either side has exactly come out as winners on this fight.

Nor do I think it's likely that either side will. (Although there's still plenty of time for both sides to attempt to create a fictional story. Something which I think we all agree that one side is better at than the other.)

Remember how easy it was to tag somebody as being against our military for not just voting yes on anything that was post 9/11 related? He was for it before he was against it...and all that. That's what this is. Both sides love to use the old "Just give us an up or down vote on only this one issue" when its in their favor. This time its in the Dems favor to want that because that pipeline stuff wouldn't create anything immediately, while the tax "holiday" would. Its a hard sell to explain why you voted against it while using the argument that you want something unrelated thrown in there. "Why are you against extending the tax breaks???"..... "Well, I'm not....but I voted against it because...." and at that point you've already lost them.

[NavyDave]

does this seem like a simple thing for Business' to accept for this 2 month plan?

That 18,350 income bracket wasn't discussed and the bill was passed. = Good Job on this new mess.

We should hire 10k people to fix it and call this bill a job creator

True a payroll tax holiday of two months is not a job creator.

Is the extension of unemployment benefits lost in this discussion? People expecting to keep more of their money is frowned upon but people expecting to get unemployment checks for 3 years or more deserve respect?

The nonsense of actually preventing real jobs because of the pipeline and its oil from an ally which means lower gas prices (hurts the agenda) and actual jobs being created which will upset the tree hugger segment of the left but not those Union members is amusing.

Is the left accusing union workers of potentially doing a substandard job that (when it comes to building the pipeline) will damage the environment?

[Larry]

Actually, I seem to remember that, at least at one time, the GOP version of the bill contained language cutting the length of unemployment benefits in half.

Now, you can argue that this was a "poison pill". Or that it would be bad for the economy. Or that it would cause an immediate jump in the nominal, "official" unemployment rate. (Thus, perhaps, hiding the fact that it's slowly getting better.)

But I don't think you can dispute that shortening unemployment benefits would reduce spending, and therefore, the deficit.

In short, the GOP bill did, at least "pay for it" partially. (I don't know how much of an impact shortening unemployment would make. Heck, it might be big enough to "pay for" the entire extension.)

---------- Post added December-21st-2011 at 10:38 AM ----------

Remember how easy it was to tag somebody as being against our military for not just voting yes on anything that was post 9/11 related? He was for it before he was against it...and all that. That's what this is. Both sides love to use the old "Just give us an up or down vote on only this one issue" when its in their favor. This time its in the Dems favor to want that because that pipeline stuff wouldn't create anything immediately, while the tax "holiday" would. Its a hard sell to explain why you voted against it while using the argument that you want something unrelated thrown in there. "Why are you against extending the tax breaks???"..... "Well, I'm not....but I voted against it because...." and at that point you've already lost them.

But they also voted in favor of extending it. The version with all the goodies attached to it.

Eminently, easily, subject to spin.

[Fergasun]

I really can't wait until some near future when the roles are reversed here (GOP in White House and slim Senate majority, Democrats in House) and the Democrats unleash the same "lets attach policy riders to important bills" BS, and then blame the other party for rejecting those bills. I really don't recall the Democrats pursuing that type of thing, but in my mind it's another new low for partisanship. Along with the "let's hold government hostage until we get the best deal possible" mentality.

The House GOP is mad the Senate GOP caved and only included the keystone pipeline provision in the two-month extension. They are mad that all of their different policy riders were rejected. They don't like the deal the GOP Senate negotiated, and they want a better deal. So they hold their breath, throw a tantrum, and try to pretend that their not throwing a tantrum. I would have no problem with the GOP House if they came out and said "we want these tax cuts to expire, we don't think its good policy" or "we simply don't like the deal that the Senate GOP negotiated" or "even if we couldn't get 100% of our policy riders, we want 50% of our policy riders on the tax cut bill". But no, we get the 100% spin zone! (and its not like both parties don't do it, but this is so blatant). As if the issue was really on extending the payroll tax cut for 12-months and not a) House GOP really doesn't think its good policy, House GOP thinks it can get better concessions / "sweeteners" than McConnell did in the Senate. Although to be against the tax extension as policy would make them huge hypocrites I think (considering their position regarding tax cuts since forever).

[@DCGoldPants]

Actually, I seem to remember that, at least at one time, the GOP version of the bill contained language cutting the length of unemployment benefits in half.

Now, you can argue that this was a "poison pill". Or that it would be bad for the economy. Or that it would cause an immediate jump in the nominal, "official" unemployment rate. (Thus, perhaps, hiding the fact that it's slowly getting better.)

But I don't think you can dispute that shortening unemployment benefits would reduce spending, and therefore, the deficit.

In short, the GOP bill did, at least "pay for it" partially. (I don't know how much of an impact shortening unemployment would make. Heck, it might be big enough to "pay for" the entire extension.)

---------- Post added December-21st-2011 at 10:38 AM ----------

But they also voted in favor of extending it. The version with all the goodies attached to it.

Eminently, easily, subject to spin.

They also supported something like that a few years ago. But when just a clean "Only this" option is on the table and its voted against.....you gotta spin really well to overcome it. Its only Dec, but look what its doing for Obama's #'s vs. the GOP in Congress. Now they are headed in opposite directions. What else would be causing that?

[Larry]

I really can't wait until some near future when the roles are reversed here (GOP in White House and slim Senate majority, Democrats in House) and the Democrats unleash the same "lets attach policy riders to important bills" BS, and then blame the other party for rejecting those bills. I really don't recall the Democrats pursuing that type of thing, but in my mind it's another new low for partisanship. Along with the "let's hold government hostage until we get the best deal possible" mentality.

Observing that something like this is only possible if the minority party can be absolutely unanimous, and the majority party is incapable of doing so.

Although another key part of this strategy is the Senate Republicans ability to filibuster every single bill in the entire Senate that's more controversial than naming a post office after somebody, and to do so for several years, without the public actually seeing that they're doing it.

[@DCGoldPants]

that kind of plays into Obama's strategy, doesn't it? The do-nothing congress is hell bent on doing nothing again. That's an easy target to run against. Easier than giving your opponent 100% of your attention. Try to put your opponent in a position of defending or being against those of his/her party in congress.That McConell quote will be used in ads.

[Fergasun]

Observing that something like this is only possible if the minority party can be absolutely unanimous, and the majority party is incapable of doing so.

Although another key part of this strategy is the Senate Republicans ability to filibuster every single bill in the entire Senate that's more controversial than naming a post office after somebody, and to do so for several years, without the public actually seeing that they're doing it.

Hence, "slim majority". How many members of Congress are "independent"? Don't you think it's something like 0%? Even when individual Congressmen take stances or vote against their party, its mostly because they can do so out of luxury. To put it another way, a growing number of Americans consider themselves independent (in my mind I think this means they are anti-both-parties, versus simply being against one of the major parties). Yet there are zero independents in Congress.

For instance, did you know that Senator Rand Paul was absent from the payroll tax extension vote on the Senate? And I didn't see any statement from him such as "I was absent, but if present I would've voted 'yes' " in the Congressional Record. Quite curious that the most prominent Tea Party Senator wasn't there. Let me see if he made a statement via his webpage on this very important issue:

Nothing. That is very interesting.

[Duckus]

Speakers Office cuts off C-SPAN cameras and microphones as Dems attempt to bring up the vote.

http://thinkprogress.org/economy/2011/12/21/393990/speaker-cuts-off-c-span-cameras-when-dems-attempts-to-bring-vote-on-payroll-tax-cut/

The speaker is a walking disaster at this point. What a cluster ****.

[twa]

that kind of plays into Obama's strategy, doesn't it? The do-nothing congress is hell bent on doing nothing again. That's an easy target to run against. Easier than giving your opponent 100% of your attention. Try to put your opponent in a position of defending or being against those of his/her party in congress.That McConell quote will be used in ads.

I'm sure

As will the lack of leadership tag be used on Obama,and the disaster of the Dem led Congress earlier

[HOF44]

Speakers Office cuts off C-SPAN cameras and microphones as Dems attempt to bring up the vote.

http://thinkprogress.org/economy/2011/12/21/393990/speaker-cuts-off-c-span-cameras-when-dems-attempts-to-bring-vote-on-payroll-tax-cut/

The speaker is a walking disaster at this point. What a cluster ****.

The vid. The GOP might as well hand the election over to Dems.

fxcrJMPGMzU

[Fergasun]

As will the lack of leadership tag be used on Obama,and the disaster of the Dem led Congress earlier

Explain to me how the President is supposed to "lead" Congress? The fact that the President, and the Senate are willing to sign off on the 2-month extension indicates that the President and the Senate have lead the GOP to drinking water; yet the GOP (the House GOP) doesn't want to drink.

I don't even fully understand what the House GOP objects to in the payroll tax extension. How is this different than having to roll 3 or 4 continuing resolutions, each time able to get something in return for rolling over the continuing resolution. No one ever claimed that having a continuing resolution extending the government from October to December consisted of a "shutdown". Everyone knew that there would be negotiations in the future, and another CR or budget would get rolled. So, why should people expect that the 2 month payroll tax extension won't get extended into the whole year? This Congress has never acted in that manner.

[SkinsHokieFan]

The 2 month extension is stupid. Thats just punting and will make payroll a nightmare in 2012

So is what the GOP is doing. Idiots

In the political game, easy victory for the Dems

[Fergasun]

Does anyone really think there will be only a 2-month extension?

This Congress is so deadlocked they need something like this to stretch out the session.

If not they would look like idiots and people would wonder why they are even bothering having a session.

Not that legislative branch oversight, is unimportant; but I doubt much major legislation gets passed (other than typical bi-partisan BS).

[@DCGoldPants]

I'm sure

As will the lack of leadership tag be used on Obama,and the disaster of the Dem led Congress earlier

Maybe try to go back and use the appeasement line again. That worked well.

Trends can and do change. But right now Dems and more importantly, independents trust the Admin over the GOP in congress on taxes. For being a career politician, Boehner seems to be making some stupid moves here.......before going on vacation.

[twa]

Explain to me how the President is supposed to "lead" Congress?

I'll leave that to other very capable hands...during the election.

O has a great deal to defend now,including the void he creates

[HOF44]

If Paul wins in Iowa and SS tax goes up on the first, the GOP will be in disarray.