If we are lucky, the dramatic cave-in on the payroll tax and jobless benefits by the Republican majority in the House of Representatives will bring lasting holiday cheer on many fronts. The 1.5 million Arkansans (and 160 million nationally) who won’t see their paychecks dip in two weeks and the thousands who won’t lose their jobless benefits dry up are the obvious beneficiaries. They and their families account for 99 percent of Americans who are not retired are disabled. A pretty good Christmas present for the country!
We always thought the significance was magnified, but the still moribund economy can use the confidence builder of continued tax cuts and jobless pay. President Obama thought the continuation of the payroll tax cut from 2009 and extended unemployment aid were important because they would keep money in the pockets of the middle class and the poor and keep them spending and raising the demand for products and services, the real job creator. We never thought they were a powerful stimulus, but every bit does help.
More important, we hope, is that the political dynamics in Washington may have shifted. For a full critical year, a relatively small fringe of the Republican Party has controlled the machinery in Washington, and they have brought the country perilously close to collapse. They lost this round, in dramatic, embarrassing fashion, and it may bode well for the future.
After winning some 50 House seats in the 2010 Republican wave, the extremists (three in Arkansas), many of them under the banner of the “tea party,” demanded that the government—that is, their own House majority, the Democratic Senate and the president—surrender to their idea of government. It included an end to important regulation of industry, deep cuts in Medicare benefits or an end to the system, slashes in Social Security, and lower taxes on corporations and the rich. It did not seem like a widely popular agenda in the United States, but they carried the day, over and over.
Most people have never acknowledged that their taxes were slashed—not increased—by Barack Obama, but the holiday war over payroll taxes may have driven that point home finally, thanks to the blundering of the Republicans. A reduction in payroll taxes that support Social Security and Medicare was part of Obama’s $750 billion stimulus program to stop the deep economic slide when he took office in 2009. Democrats controlled both houses, but Obama still had to accommodate Republicans in the Senate because with 41 votes, they could block anything they did not like.
To continue the lower payroll tax rates at the beginning of this year, Obama had to agree to the Republican demand that he continue the big income-tax reductions for people earning more than $250,000 a year. Those tax cuts, enacted under George W. Bush, had expired at the end of 2010 and the Republicans refused to continue the low payroll tax rate and unemployment assistance unless the president and the Democrats continued the Bush tax cuts for the wealthy through the end of 2012. The threat was raised again in the summer when the country reached its debt ceiling and faced the immediate prospect of repudiating its debt for the first time in history. They demanded a commitment to large reductions in government programs, including Medicare, Medicaid and pollution control, in exchange for not shutting down the government and reneging on U.S. debts.
Obama caved in. Many Democrats, particularly those on the left, thought the president should have stood his ground. When the other side seemed ready to bring the country to ruin if they did not win, the president thought he had no choice. Obama’s approval rating, never robust in Arkansas, plummeted, though not like Congress’.
This time, Obama stood his ground. He said the payroll tax cut and unemployment benefits had to be extended until the economy was in full recovery mode. The tax cut was unpopular among Republicans, and the freshman class and a few others were adamant that taxes be allowed to go back to 6 percent because Social Security and Medicare needed the money and that jobless relief not be extended so that the unemployed would be forced to take whatever jobs they could get. The Republicans would give in on payroll taxes and unemployment only if they could get big concessions from the president and the Senate on other fronts.
Early this week, after Senate Republicans worked out an emergency deal with the president and Democrats to extend the tax cuts and jobless benefits through February, the tea-party Republicans—they included our three GOP congressmen, Tim Griffin, Steve Womack and Rick Crawford—said they wanted the House to stand firm against it, demanding that the president and the Senate extend everything for one year and adopt their policies in other areas, which was an impossibility. They believed it gave them cover for raising middle-class taxes.
Griffin, Crawford and Womack all put out statements calling for the majority leader to refuse to budge. “Irresponsible,” Crawford called the continued tax cuts and jobless pay. The House voted down the Senate emergency bill with only a handful of Republicans supporting it.
After one day, the blunder was transparent. The vote had made it clear to every American that Republicans opposed lower taxes for everyone but millionaires. The party’s creed for the 2012 elections would be higher taxes for the middle class and the poor, lower taxes for the very rich.
Senate Republicans condemned the House, as did party regulars everywhere. The House had undermined the party’s election prospects in 2012. Speaker John Boehner, who had tried to get the fringe and his old-line colleagues to compromise, finally made a conference call to the big House majority. The call did not permit members to respond. Only the speaker’s voice was heard. We will vote again tomorrow, he said, and you will accept the proposal you defeated yesterday by unanimous consent. If one person objected, the bill would die. Otherwise, it would be declared to have passed by unanimous consent. No one would actually vote.
Griffin put out a grudging statement supporting it this time. Crawford edited the “irresponsible” comment from his website and sent a letter to Boehner supporting a positive vote this time. Crawford’s crawfishing letter made the national news. Vin Weber, a former Republican congressman and now a party strategist, and Senate Democratic Leader Harry Reid offered a similar conclusion. Perhaps the radical Republicans had learned a lesson. It’s best to compromise to make government work and wiser politically, too. Let’s hope they were right. — Ernie Dumas
