Political Animal


December 17, 2011 8:00 AM Senate leaders strike payroll deal

By Steve Benen

With only two weeks left before the payroll tax cut expires, Democratic and Republican Senate leaders reached an agreement late yesterday for a temporary extension. It’s a positive development, but there’s quite a bit of work left to do.

Senate leaders said on Friday night that they had reached a deal that would extend a payroll tax cut for two months — falling far short of the yearlong extension they had been seeking. The agreement would also speed the decision process for the construction of an oil pipeline from Canada to the Gulf Coast, a provision necessary to win over Republicans who opposed the tax break.

A senior administration officials said the deal announced Friday night met the test that President Obama had set out: that Congress would not go home without preventing a tax increase on 160 million Americans.

However, rank-and-file members of the House said on Friday that they were opposed to a short-term extension. Approval in that chamber, even with the provision on the Keystone XL pipeline, is no sure thing.

That last point is of particular interest, since rank-and-file House Republicans seem rather eager to let the payroll tax go up next year, and the Senate bill doesn’t include their long list of demands. The Senate will almost certainly approve yesterday’s compromise fairly easily, probably later today, but if the lower chamber balks, there’s a problem. (Keep a close eye on House Democrats, whom Boehner may need to rely on.)

In the meantime, I’d say this generally isn’t a bad deal. Democrats get the middle-class tax break they wanted and an extension on unemployment insurance benefits, at least for two months. Republicans get the Keystone XL pipeline measure they wanted, but it’s not a green light for the project itself — the provision only calls for an expedited review process. The measure could be signed into law, only to have Keystone XL rejected soon after.

The prospect of having this same fight again in February is unappealing, but as far as congressional Dems are concerned, it’s not that bad. After all, as Democrats see it, they’re likely to have the upper hand — the debate in February would put Republicans in the awkward position of fighting for a middle-class tax increase in an election year.

And what about financing? The two-month package, if approved, would cost about $40 billion and be paid for with higher fees on mortgage lenders Fannie Mae and Freddie Mac.

In a year in which we’ve seen plenty of awful deals in which Democrats conceded far too much, this one seems relatively good.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


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  • lou on December 17, 2011 8:09 AM:

    Steve. Come on! This it total BULLSHIT! Nothing but extortion and shell games!

  • Josef K on December 17, 2011 8:09 AM:

    However, rank-and-file members of the House said on Friday that they were opposed to a short-term extension. Approval in that chamber, even with the provision on the Keystone XL pipeline, is no sure thing.

    Exhibit #250,000 on why John Boehner should never again be called a "leader". Makes you wonder what'd happen if both the President and Vice-President were removed and he had to take the Oath, doesn't it?

  • Danp on December 17, 2011 8:10 AM:

    The deal also postpones scheduled reimbursement rate cuts for Medicare/Medicaid. Sounds like a preview of the process to nullify the entire debt reduction deal Republicans fought so hard to get a few months ago. What exactly was the 98% John Boehner wanted?

  • c u n d gulag on December 17, 2011 8:14 AM:

    I don't know that it's 'more than palatable.'

    But, at least it's not the usual corn-infused sh*t on a paper plate that's handed to us with what they claim is a 5-star Michelin dining rating.

    And, though I don't look forward to going through this whole tax BS thing again in February, if the Congressional Republicans are stupid enough to want only 2 month extensions all through the rest of an election year, I say, "Go for it, Big Guys! Keep preening for your Teabagger pals!!!"

    Either they're idiots, or the powers-that-be have told them that they are growing more and better turf to astro the rubes with next year - which is not beyond the realm of possibility.

  • Josef K on December 17, 2011 8:22 AM:

    My preceeding comment was actually my second reaction. My first was Oh for gods sake! Just let the damned thing expire so we can stop pretending either side actually cares about the rest of us!

    Not sure how fair that is, but at this point I'm not sure I care either.

  • martin on December 17, 2011 8:35 AM:

    In a year in which we’ve seen plenty of awful deals in which Democrats conceded far too much, this one seems more than palatable.

    A shit sandwich with ketchup is still a shit sandwich.

    One party is serving, the other is eating. You choose the winner.

    Mr Captcha says he he cannot ntsfurb

  • DAY on December 17, 2011 8:45 AM:

    There have been many, many telling moments this past year (decade?) that are evidence of Washington being divorced from reality. Like HW Bush's supermarket scanner moment, they have no concept of how the rest of us live.

    Newt's "solution" to several problems (unions, poor kids) is he would fire the parents from a good paying job, and force their children to do it, not for money, but for 'motivation'.

    I have yet to hear anyone in office put forward a long term program to solve our debt and employment crisis (one and the same).
    Gulag, for example, with his health and age issues, is not going to find steady employment in our current economy. And the best they can offer is another 60 days of help?

    As Josef K says, " we can stop pretending either side actually cares about the rest of us!"

  • hells littlest angel on December 17, 2011 8:45 AM:

    While the deal is for a mere two months (and that seems really ridiculous), I do think the Republicans get very little out of it. On the other hand, while there's not much more that can be done against the intransigent America-haters the Republican party have become, I don't know that pushing the Immovable Object back half an inch looks like much of a victory to Democratic voters.

    I wish I could just go to sleep and wake up in 2013, to read that the furniture of the former RNC headquarters is being sold at auction.

  • Okie on December 17, 2011 9:03 AM:

    Higher fees on Fannie and Freddie? They call this "paying for" something?

    Fannie and Freddie are already broke from the mortgage meltdown, and taxpayers are - in a way - on the hook for these two already.

    If this is what the hostage-takers wanted, let's give it to them.

  • lou on December 17, 2011 9:13 AM:

    "more than palatable" to "relatively good"

    there goes your shit sandwiches


    There is no goddam way to make either side look "relatively good" in this mess but I get the partisan necessity to say it anyway.

  • schtick on December 17, 2011 9:20 AM:

    Let's see, we got an extension on unemployment when the tealiban demanded an extension for Bush tax cuts. How long was the unemployment extension? How long was the Bush tax cuts?
    Two month extension for payroll cuts. How sweet. And the pipeline is for how long?
    Stick it up our asses again. We so love it.

    crapcha....18367 ngsicke....more then that is sick.

  • bdop4 on December 17, 2011 10:11 AM:

    By all means, lets accelerate the decision-making process and REJECT the pipeline.

    That's a result I could live with.

  • c u n d gulag on December 17, 2011 11:08 AM:

    And yet, I still keep applying for jobs!

    But, out of all of the hundreds of resume's I've sent out in the past year, I've gotten exactly ONE call for an interview - I mean from a legit company, not some internet 'work from home, just give us a couple of hundred bucks to be authorized, and your bank account number. and start raking in the dough today!' ones.

    And that was for door-to-door cable and internet sales in Westchester county, NY.
    That means just driving down there and selling means putting about 150+ miles a day on a car with over 150,000 miles on it already. None of that is anything but tax-deductable, of course.
    And never mind that it would involve a handicapped person like me trying to get to the doors of houses when there's ice and snow on the walkways and steps - but I said I'd be willing to give it a try!

    But after I expressed this concern about may mobility and access in inclement conditions, I was called later and told that there was 'no interest at this time.'
    I know I should have kept my mouth shut, but if I didn't tell them, and I got hurt, then they'd say they weren't liable because I should have told them. I mean, it's not like I'm in a wheelchair or anything - at least, not yet. I limp, but I can disguise that for a few yards. If I need to go further, I use a walking cane - which is useless on ice.

    Out of hundreds of resume's.
    And I've been working all of my adult life, with great experience, for over 35 years.

    People like me are SOOOOOOO screwed.
    But, I can't get disability because, apparently, I'm not disabled enough.

    Ok, enough of my kvetching, no one, least of all most people in government, gives a shit.

  • bob atkinson on December 17, 2011 1:49 PM:

    bdop4 do you see any way to de-couple the sixty day payroll/unemployment extension from the demand that the administration make a decision on the Keystone pipeline within sixty days? To me this will only result in a GOP demand sixty days from now that the pipeline be approved or the payroll/UP will not be extended again. Hopefully it will only reinforce the negative opinion Americans seem to be developing towards the Republican party in particular but I have no doubt the hostage taking will resume once the sixty day has passed.

  • liam foote on December 17, 2011 2:37 PM:

    It will be interesting to see what hostage the GOP holds as we approach expiration of the Bush-era tax cuts for the rich at the end of 2012. Now they have held extension of tax cuts for the middle class and benefits for the unemployed hostage for the sake of an oil pipeline. But two months from now we are back to step one in this matter.

    Mr. Obama will not give in to GOP pressure to rush authorization of the pipeline and the GOP will again threaten 160 million workers plus benefits for the unemployed. Will it be at this point that they begin to talk about extension of Bush cuts for the wealthiest?

    Recall that the hostages they held in order to force Obama to extend the Bush cuts in 2010 were also the nations unemployed.

  • Laldyhawke on December 17, 2011 4:03 PM:



    What stories like this bring home is that today's Congressional Republicans are not really so much in rebellion against President Obama and the Democrats. One reason that our country's politics have become so polarized is that the new Republican Party has repudiated policies that they themselves advocated only a few years ago. One of President Bush's signature initiatives was to expand the federal role in education. Today's Republican candidates want to abolish the entire Department of Education. President Bush dramatically expanded the reach of Medicare to include a prescription drug benefit. Today's Republicans want to turn Medicare into a block grant program that will force an increasing share of medical costs onto beneficiaries. President Bush pursued an interventionist foreign policy. Many of today's Republicans want us to retreat from global involvement.

    It was these Bush initiatives--particularly the Medicare expansion and foreign wars, and thirdly his infamous tax cuts--that caused a gigantic expansion in the federal deficit. And even today, most of the federal deficit is the result of these Bush policies. (The other major contributor to the deficit is the recession itself, which has reduced government revenues, and triggered automatic spending increases for such entitlements as food stamps and unemployment benefits.) Therefore, when Republicans in Congress today rail against excessive government spending and the deficit, they are really in rebellion against Bush policies more than Obama's.