On the brink of failing to extend a payroll tax cut into the New Year, Congress sends the average worker an early Christmas present.
Just days before Christmas, House Speaker John Boehner announced a Republican decision to accept a short-term extension of the payroll tax cut, preventing roughly 160 million working Americans from having to pay one thousand dollars extra in taxes over the coming year. The tax cut was set to expire December 31st. The $33 billion package also includes an extension of benefits for millions of long-term unemployed Americans and Medicare payments for doctors also set to expire at the end of the month.
President Barack Obama had personally appealed to Boehner in a phone call, and Senate Majority Leader Harry Reid had addressed a letter to the Speaker requesting him to reconvene the House, which had adjourned for the holidays, and approve the Senate’s short-term extension. Republicans had opted for a one-year extension of the benefits package rather than eluding responsibility to constituents by “kicking the can down the road,” as several members of the GOP have stated. Despite opposition, Boehner continued to assert the GOP as “the party of lower taxes for the American people.”
“We have fought for lower taxes for the 21 years I’ve been in this Congress,” he said. “We’re going to continue to be the party of lower taxes.”
Differences between the parties also encompassed how to fund the programs for the next year, a sticky point which both sides will take up after returning to Washington in late January. Republicans favor offsetting costs by freezing the wages of federal employees; however, Democrats have long sought a tax increase on the wealthiest Americans, those making upwards of one million dollars annually. The party temporarily dropped their plea after it became clear Republicans refused to consent.
A Wall Street Journal editorial accused House Republicans of giving Obama the upper hand in the political arena and advised the party to pass a quick extension of the benefits package in order to “cut its losses.”
Reaching Consensus
Boehner finally reached across the aisle and conceded to the Senate’s demand after the House adjourned the Tuesday before Christmas, caving to mounting opposition from Democrats and some Senate Republicans who had already headed home for the holidays after approving the short-term tax cut legislation. Senate Republican John McCain (R-Ariz.) stated in a tweet that the Wall-Street Journal was “right on the mark” after calling the House strategy a “fiasco.” The agreement came just nine days before the deadline.
Senate Minority Leader Mitch McConnell suggested a compromise later adopted by House Republicans that provided for the passage of the two-month extension in exchange for a conference committee appointed by Senate members for the purpose of coming to terms on a longer-term solution. The proposal received support from both the President and the Senate Majority Leader, the former praising Congress’ efforts to “end the partisan stalemate” while also emphasizing the urgency for congressional action to extend the payroll tax relief for the remainder of 2012. The bill was passed by unanimous consent, which did not require all House members to return for a vote.
Before consensus had been reached, Obama, who had delayed his Hawaiian vacation because of the deadlock, chided House Republicans for their unwillingness to compromise on an issue on which “an overwhelming number of people in both parties agree.” The White House also launched its own campaign on Facebook, Twitter, and whitehouse.gov entitled: What Forty Dollars a Paycheck Means to American Families. Congress’ latest action prevented working Americans from losing $40 from each paycheck beginning January 1st.
Peorians Weigh In
Central Illinois residents have followed the squabbles in Washington closely over the past few weeks, some expressing anger over Congress’ inability to reach an agreement on a one-year extension while others are grateful a short-term solution has been passed.
“I’ve been unemployed for over a year after my company downsized and over 200 workers lost their pay,” says Martha Yates, a 42-year-old single mother of three. “For me and my kids benefits for two months is better than no benefits. It’s not a job, but it’s something.”
Ray Bachmann, a computer programmer, is thankful for the two-month extension but still says Congress isn’t doing its job. “It would be nice if workers had some certainty about what’s going to happen for the remainder of the year rather than practically living month to month without any knowledge of what’s going to happen next. Congress hasn’t lived up to my expectations. I’m hoping they can put something more long-term together in the future.”