The ‘payroll tax cut’ debate is not about the payroll tax cut

at 11:14 AM ET, 12/20/2011


(Joshua Roberts - Bloomberg)
The single most important thing to understand about the ongoing debate over the payroll tax cut is that it’s not about the payroll tax cut. This has gotten somewhat confused in the current contretemps over whether the extension should be for two months or one year, but if this were actually about the payroll tax cut, there would be no argument over the length of the extension.

Consider a negotiation in which both sides agreed on extending the payroll tax cut: Republicans would propose extending it for a year, every Democrat in the House and Senate would vote “aye,” and President Obama would sign the legislation into law before the week is out. But that’s not the negotiation we’re having.

Rather, Democrats and Republicans are arguing over the price Democrats are willing to pay and Republicans are willing to accept in order to extend the payroll tax cut for a full year. Republicans want, among other things, the Keystone XL Pipeline and further cuts to discretionary spending. Neither of those things, you’ll notice, is “a payroll tax cut.” Democrats oppose resolving big environmental questions through a rider to a must-pass tax bill, and they’re against some of the cuts Republicans are proposing. Neither of those concerns, you’ll notice, are concerns about a payroll tax cut.

What’s happening right now is that Senate Democrats and Senate Republicans came up with a mutually acceptable bill to kick the can down the road for two months, but House Republicans are saying that’s unacceptable to them. So now the two sides are negotiating over how best to negotiate over the non-payroll tax cut elements of this deal.

But make no mistake: If Republicans and Democrats both supported an extension of the payroll tax cut, this deal could get done tomorrow. Republicans don’t support an extension of the payroll tax cut absent substantial policy concessions beyond the payroll tax cut, and that’s what’s holding up an agreement.

Related: This is officially the least popular Congress since the advent of congressional polling.

 
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