Commentary: The Continuing War Over Payroll Tax Cuts

Commentary: The Continuing War Over Payroll Tax Cuts

Though President Obama won the latest standoff with Congressional Republicans over the payroll tax cut extension, the GOP goal of defeating him remains in place, even if it means harming the economy to do it.

Published December 27, 2011

Congress’ recent passage of a two-month extension of the payroll tax cut may allow most Americans to breathe a brief sigh of relief, but it is only a temporary truce in a corrosive war that has enveloped our political culture.


For the past few weeks the Obama Administration and the GOP have locked horns over this legislation to help 160 million working- and middle-class Americans. The President and other economic experts believe the tax relief for salaried workers will help jumpstart the economy and foster jobs. It would be a major relief to African-Americans, whose median income stands at $32,068. Experts say the measure would pump $120 billion of disposable income into the U.S. economy in 2012.  

Both parties agreed on the payroll tax cut in principle, but the GOP says it is concerned about how to pay for the $112 billion dollar tax break that was underfunded last year. This, along with refusing to raise taxes on the wealthy, has been the pretext for the GOP rejecting the latest administration tax proposals for a vast majority of the population. Mind you, the last rejection comes after a bill extending the payroll tax cut was negotiated with House Speaker John Boehner. In addition, the GOP added a line item to the bill that would approve the controversial Keystone XL Pipeline to the payroll tax bill, knowing that environmentalists (a key component of Obama’s constituency) vehemently oppose it.  

Boehner and the GOP’s obstinacy led absolutely nowhere, and President Obama denounced the Republicans and their partisan antics, accusing them of holding the tax cut hostage as a means to “wring concessions from Democrats on issues that have nothing to do with the payroll tax cut — issues where the parties fundamentally disagree.”

The President is right. By stalling on the proposed tax cuts, the GOP hoped to box Obama into another stalemate — knowing that it would hurt the economy further. And this, unbelievably, seems to be their goal, because they believe, with good reason, that a weaker economy will hurt the president’s re-election chances. The GOP actions are therefore not about what’s good for America, but what they can do to thwart Obama.

After the holiday break, both parties will have to hash out a long-term extension of the payroll tax cut. With Tea Party Republicans determined to sabotage President Obama at every turn, this will not be an easy or timely negotiation at all. Unfortunately, while the GOP continues to apply their destructive scorched-earth policy to Obama and the Democrats, it is the American people who are really getting burned in the process.   

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(Photo: REUTERS/Kevin Lamarque)

Written by Charlie Braxton


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