Were we too eager to jump on the bandwagon and say that the GOP House members should have caved earlier on the payroll tax holiday?
It seemed to me that President Obama found the one tax cut that might be deemed questionable and then ambushed the GOP over it, making them appear to eager to tax the middle class, while sparing “millionaires and billionaires.”
This was not the case, of course, but the whole debate over the tax holiday was political theater. Now, my feisty friend Crystal Wright makes a case that the House Republicans, far from putting up too much of a fight, capitulated too soon:
I don’t care what the Wall Street Journal said or other so called political geniuses from the GOP establishment, House Republicans blew it this week when they caved into Senate Democrats two month payroll tax holiday scam. Speaker Boehner should have called Senate Majority Leader Harry Reid’s bluff and forced the Senate to come back to Washington and work with the House to pass the payroll tax cut for a year.
After all, the House passed its yearlong version of the payroll tax holiday, which the Senate rejected. Yes, it is a tax holiday not a cut because payroll taxes fund the Social Security Trust Fund and can’t be cut forever.
If Boehner held his ground, the Senate probably wouldn’t have returned and 160 million would not have received an average of $1000 in savings, which would have been good. The payroll tax holiday/cut, reducing the tax paid by employees from 6.2% to 4.2%, has done nothing to stimulate the economy over the past year when it was concocted last year. Just like Obama’s $800 billion stimulus and potpourri of other failed costly government spending programs like HAMP, Cash for Clunkers, Cash for Caulkers haven’t stimulated anything but our national debt.
Crystal says that Boehner should have taken the fight to the nation with an aggressive message about how destructive the holiday already has been. Republicans, for example, could have gone on TV and reminded us that the holiday last year robbed the Social Security Trust Fund of $120 billion without stimulating the economy.
The holiday, Crystal argues, is a modern version of playing Robin Hood with the Social Security fund. Americans should be told in no uncertain terms how damaging this is. If extended over eight years, the holiday would wipe out the Social Security Trust Fund.
Here is what Crystal thinks that Boehner should say when the issue rears its ugly head in two months:
Rather than focusing on real job creation and tax policy reform, President Obama wants to risk ending Social Security as we know it by giving you a miniscule payroll tax cut.
Crystal is absolutely right on the issues, but it’s a political year and if there's one thing President Obama is good at, it is campaigning. Could anybody oppose the extension without being characterized by the president as an enemy of the middle class?
While many opponents of the extension recognize that it imperils Social Security, the House GOP ended up opposing the Senate bill because it only extended the holiday for two months. They found themselves backing President Obama's position that the holiday should be extended for a year. Could they say, when the issues comes up again, that they are now opposed to the extension they once supported? In other words, can they be against it after being for it?
And—third point—we all know that the Social Security system is already in deep trouble. Like the SDS woman in my college Shakespeare class who picked Richard III as her favorite king of England, on the grounds that he was so bad he would hasten the revolution, some see the payroll tax holiday, with results potentially disastrous for Social Security, as a step towards reform or replacement of a bad system.