Payroll Tax Cut

Senate Passes Payroll Tax Bill Over Broad GOP Opposition

Brian Beutler | February 17, 2012, 12:17PM

Harry Reid (D-NV) and Mitch McConnell (R-KY)

Quick on the heels of the House, the Senate has passed legislation to extend a two percent payroll tax cut through the end of the year.

The final vote was 60-36 with 30 Rs and 6 Ds bucking their leaders to oppose the package. It now goes off to a jubilant White House for President Obama's signature.

The legislation, which also extends emergency unemployment benefits and Medicare reimbursement rates until January 1, 2013.

Payroll Tax Cut

House Passes Payroll Tax Cut Compromise

Brian Beutler | February 17, 2012, 11:41AM

John Boehner

By a comfortable margin, the House of Representatives on Friday passed legislation to extend a two percent payroll tax cut through the end of the year.

The final vote was 293-132, with 91 Republicans and 41 Democrats bucking their party leaders to vote against the package. Five Republicans and four Democrats did not vote.

The bill reflects an agreement between GOP and Democratic leaders in the House and Senate. It also extends emergency unemployment insurance though December, though it reduces the number of weeks in which people looking for work can draw on benefits. And it means that Medicare physicians won't experience a steep pay cut by extending their reimbursement rates for at least 10 months.

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Payroll Tax Cut

Payroll Tax Drama Exposes Rift Between House And Senate GOP

Brian Beutler | February 16, 2012, 1:05PM

The House and Senate have cut a deal to extend the payroll tax cut, unemployment benefits, and Medicare physician reimbursement rates. But it almost didn't happen. And the near miss is exposing a rift between House GOP leaders and their Senate counterparts.

Late on Wednesday evening, Senate negotiators -- four Democrats, three Republicans -- had a vote count problem. To move the payroll tax cut forward, four of them needed to sign on to the broad agreement. House Dem and GOP negotiators were all lined up. But none of the Senate Republican conferees would put pen to paper. When Democrat Ben Cardin (D-MD) wouldn't sign on either, based on his objection to cuts to federal worker pensions, the Senate found itself one vote shy.

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Paul Ryan

Ryan: Even If Obama Wins We Don't Need To Change Our Tax Philosophy

Brian Beutler | February 16, 2012, 11:06AM

Sen. Ron Wyden (D-OR), and Rep. Paul Ryan (R-WI)

The consensus among GOP leaders, and really leaders of both parties, is that the two biggest issues dividing the parties -- how much wealthy Americans should pay in taxes, and how the health care safety net should be structured -- will be decided by the elections in November.

The implication is that if Republicans win convincingly, the country will have provided them a mandate to further reduce taxes and roll back Medicare, Medicaid and the health care law.

But what happens if President Obama and the Democrats walk away with the prize? Will Republicans agree to increase, fairly significantly, the amount of money flowing into the Treasury?

Er, um. Maybe.

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Payroll Tax Cut

Paul Ryan: Yes, Payroll Tax Fight Hurt GOP

Brian Beutler | February 16, 2012, 10:15AM

Rep. Paul Ryan (R-WI) speaks during a press conference on the debt ceiling in Washington, D.C. on August 1, 2011

With the ink drying on a final deal, one of the highest profile Republicans in Congress said the December and February fights over extending the payroll tax cut and other expiring provisions through the end of the year have hurt Republicans -- at least in the short term.

"It's a tough issue because they had to compromise... But yeah, I think the payroll tax deal, from a political perspective, certainly caused damage because it muddled the differences [between the parties," House Budget Committee Chairman Paul Ryan (R-WI) told reporters at a breakfast roundtable hosted by the Christian Science Monitor. "It got us down into a skirmish, where the differences got muddled, which is I think what the President loves."

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Barack Obama

CHART: Don't Buy The GOP Hype On Obama Budget Deficits

Brian Beutler | February 15, 2012, 5:40AM

President Barack Obama and Vice President Joe Biden

Republicans have taken to describing President Obama's budget as "deficits built to last" -- a play on Obama's call for an economy built to last. The implication: hand the government over to us, and we'll rid the budget of this deficit scourge. Put aside for a moment that wiping out deficits too fast would be economically disastrous, leading to rocketing unemployment rates. The truth is there are plenty of budget proposals out there, including Paul Ryan's "Path To Prosperity," which was endorsed by nearly every Republican in Congress. And these also project significant deficits well into the future.

Of course, Obama's budget is very substantively different from Paul Ryan's Path to Prosperity. Obama's would draw down deficits over the coming decade with a mix of proposed tax increases on high income earners and corporations, already enacted spending cuts, and additional cuts to health care spending and other programs. But it maintains the basic shape of the existing safety net over the long term. Ryan's calls for huge cuts to the safety net, for making Medicaid a block grant program, and, after a decade, for phasing out Medicare. But he proposes significant tax cuts at the same time.

And even with all that slashing, just what does that do to the projected deficit? The chart below tells you quite starkly:

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Contraception

Blunt: Contraception Mandate Not 'Only Litmus Test' For Presidential Candidate

Brian Beutler | February 14, 2012, 4:23PM

Senator Roy Blunt (R-MO)

You'd think the GOP's ongoing, dogged push to allow any employer to deny female employees contraceptive coverage is an indication that Republicans take a strong stance on the issue.

But it's not. On Tuesday afternoon, I asked Sen. Roy Blunt (R-MO) whether he could support a Republican presidential candidate who had required religious institutions to provide female employees with contraceptive coverage.

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Harry Reid

As Payroll Fight Wraps Up, Dems Prepare For Next Battle

Brian Beutler | February 14, 2012, 3:47PM

House Democrats will support a GOP bill to extend the expiring payroll tax cut through the end of the year, when Republicans bring it to a vote later this week. That basically puts to rest any remaining doubts that the provision will expire at the end of the month.

Now the fight is on between the parties over whether and how to renew two other expiring provisions -- extended unemployment benefits, and Medicare physician reimbursement rates (the "doc fix") -- before March. And the balance of power in this battle is much less clear.

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Budget

The Truth Behind The GOP's '1000 Days Without A Budget' Canard

Brian Beutler | February 14, 2012, 10:17AM

Harry Reid (D-NV) and Mitch McConnell (R-KY)

Turn on any cable news channel this week and you'll very likely hear a top Republican froth in anger over the fact that Senate Democrats haven't passed a budget in more than 1000 days.

This particular talking point has been around for months -- long before the Senate crossed the 1000 days threshold. Now that it's budget season, Republicans hope it pops, filters up into mainstream news coverage, and sows doubt in the minds of voters who don't understand the Congressional budget process, and don't realize how unimportant, and in most crucial respects false, the line is. Alternatively, they hope Senate Dems get spooked and move ahead with a budget document that exposes their differences and leaves them open to political attack -- but has no impact on policy whatsoever.

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Payroll Tax Cut

Dems Plot Payroll Tax Cut End Game

Brian Beutler | February 13, 2012, 5:29PM

Sen. Harry Reid (D-NV)

After a few hours of thought, Democrats have decided the GOP's blink on the payroll tax cut is an unvarnished good, not some devious trick.

Republicans have all but agreed to renew the payroll tax cut through the end of the year without paying for it -- a huge tactical swing for them. But they're still insisting that the other expiring measures -- extended unemployment insurance (UI), and Medicare physician reimbursements (the "doc fix") -- are somehow offset with cuts elsewhere.

Having taken the most politically important, and most costly item off the table, are Republicans in the driver's seat in negotiations over extending the other two items? Not necessarily.

A senior Senate Dem aide explains how Democrats might well proceed from here.

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Payroll Tax Cut

Why The GOP's Payroll Tax Cut Cave Is An Even Bigger Deal Than You Think

Brian Beutler | February 13, 2012, 4:40PM

House Speaker John Boehner (R-OH) and President Barack Obama

The GOP's accession to reality on the payroll tax cut is being cast as a key victory for Democrats and President Obama. Republicans caved, the payroll tax will almost certainly be renewed, and the economy won't take a tough hit just as the recovery's beginning to accelerate.

But it also reveals a flaw -- a potentially huge flaw -- in the conservative movement's generational strategy to roll back the federal safety net.

These might sound like two wildly disparate issues, but they're actually variations on a years-long theme. And the outcome of the payroll tax debacle bodes poorly for the GOP on the rest of their long-run goals.

Here's why.

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Payroll Tax Cut

GOP Drops Demand For Offsetting Payroll Tax Cut

Brian Beutler | February 13, 2012, 2:10PM

Speaker John Boehner (R-OH)

Facing emboldened Democratic negotiators and a quickly thinning legislative calendar, House Republican leaders have offered to extend the payroll tax holiday through the end of the year without paying for it. The development represents a dramatic reversal for GOP leaders, who nearly allowed the payroll tax cut to lapse in December in part because of their insistence that the package be financially offset.

"Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue regarding offsets, unemployment insurance, and the 'doc fix,'" said GOP leaders in an official statement Monday afternoon.

That's a huge concession to legislative and political realities, and a tacit admission that Republican leaders desparately want to avoid another no-win fight over renewing a tax cut that overwhelmingly benefits the middle class.

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Budget

How Obama's Budget Throws A Big Punch At The GOP

Brian Beutler | February 13, 2012, 1:47PM

President Barack Obama during his 2012 "State of the Union" address

President Obama's fiscal year 2013 budget envisions the economy healing steadily after years of hemorrhaging and stagnation -- and key government services surviving mostly despite the violence done to the federal ledger by the Bush tax cuts, the wars in Iraq and Afghanistan and the 2008 financial crisis.

It also shows federal deficits declining steadily over the coming decade, and the national debt stabilizing as a share of GDP over the same period.

These are the consequences of multiple, competing strategic ideas:

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Mitt Romney

Tax Avoidance Questions Continue To Haunt Romney

Brian Beutler | February 13, 2012, 5:45AM

Reporters covering the GOP primary horse race may have moved on, but a key question continues to dog Mitt Romney's presidential campaign -- one that will loom large if he wins his party's nomination. Has he avoided U.S. taxes by investing a fortune offshore?

At a town hall event in Maine on Friday, an antagonistic questioner asked Romney, "Do you think it's patriotic of you to stash your money away in the Cayman Islands?"

In response, Romney correctly noted that money U.S. taxpayers invest offshore is largely taxed just as it would be if they invested it in the states. But he once again denied avoiding any U.S. taxes by investing offshore -- a claim tax experts openly doubt.

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Budget

Obama To Draw Contrast With GOP In Budget

Brian Beutler | February 13, 2012, 5:43AM

President Barack Obama

Though required by law, White House budgets are largely political documents that tend to become more and more political as reelection time gets closer and closer.

This year's will technically be no different -- but the long-term stakes will be much higher than they usually are and clarifying that fact for voters will be key to President Obama's appeal in 2012.

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