How did a debate over the GOP’s signature issue – tax cuts – manage to shift so suddenly in Democrats’ favor, as indicated by a scathing editorial in this morning’s Wall Street Journal?
The answer involves the conflict of politics and policy.
When Senate Democrats introduced their first payroll tax package the week after Thanksgiving, both sides entered the battle assuming that it would be a matter of figuring out how to pay for a one-year extension. Democrats wanted a surtax on millionaires, which Republicans swiftly rejected.
So far, the parties were on equal political footing.
Then, when Senate Republicans’ turn came to offer a payroll tax measure, Senate Minority Leader Mitch McConnell (R-Ky.) unveiled a plan that would have extended a pay freeze for government workers, trimmed the federal workforce by 10 percent and means tested federal entitlement programs.
The measure seemed tailored to win GOP support. Instead, a majority of Senate Republicans voted against it – twice.
That’s when it became clear that while Democrats were approaching the payroll tax debate from a political perspective, many Republicans were taking the opposite approach – viewing it as a policy debate.
The statements of the 26 Senate Republicans who voted against McConnell’s original plan revealed that many GOP lawmakers simply viewed the payroll tax holiday as bad policy and were reluctant to extend it, no matter how it was paid for.
By the time the battle had moved on to the two-month compromise negotiated by McConnell and Senate Majority Leader Harry Reid (D-Nev.) last week, the upper hand had shifted back to the GOP.
Republicans in the House had succeeded in turning a debate over the payroll tax holiday into one over the Keystone XL oil sands pipeline, which GOP lawmakers argue will lead to the creation of thousands of jobs.
So when news leaked out Friday night of a two-month McConnell-Reid compromise including the Keystone provision, it appeared that the GOP had scored wins on two fronts – both on the pipeline and on neutralizing the Democratic offensive on the payroll tax issue, at least over the holidays.
Then it was House Republicans’ turn to revolt – and like Senate Republicans a few weeks earlier, they, too, opposed the deal for reasons of policy, not politics.
In a conference call Saturday – and in closed-door conference meetings this week -- House Republicans expressed vehement opposition to a two-month measure that they believed was the very kind of short-term fix they were sent to Washington to put an end to.
And thus, the political calculus shifted back in Democrats’ favor as they cast the choice as one between a two-month extension of the payroll tax holiday and none at all.
Polls show that the public overwhelmingly supports the payroll tax holiday. House Republicans could tap into that sentiment by arguing that they favor a longer rather than shorter-term extension, and are willing to stay in Washington in order to win it.
But given what seem to be the party’s political missteps on the issue over the past month – as well as the lukewarm statements that GOP leaders in both chambers have made on the issue, seized upon in recent days by congressional Democrats – Republicans now find themselves in a defensive crouch.
That it comes on the issue of taxes – and just four days before Christmas – is only the latest surprise in a payroll tax debate that has upended both parties’ conventional wisdom.