The national media happily trumpeted their belief this holiday season that House Republicans had been handily beaten in the payroll tax debate.
The truth is, everyone lost – especially the country.
It is sad and amazing to see how the Republicans fumbled the issue and came out looking like losers. How in the world did they manage that?
Consider: Democrats ended up seeking a ridiculous two-month extension of the current payroll tax cut. Republicans actually wanted a yearlong extension of the cut – a temporary boon to taxpayers and workers. Ultimately, the Democrat-led Senate went home for Christmas with a take-it-or-leave it two-month tax cut sent to the House.
House Republicans were forced to go along with it or have the higher payroll tax kick in at the first of the year – which would’ve been a huge public relations nightmare, and might have been a winning election issue for Democrats. Imagine the headlines: “Republicans raise taxes on workers, just in time for Christmas!”
To the consternation of conservatives in the GOP caucus, the House accepted the two-month extension – a nightmare for human resources and payroll departments all across the country. The tax rate may change in another two months, or it may not.
So Democrats got their little win.
On closer inspection, it’s a Pyrrhic victory. For one thing, again, they managed to sell the media on the notion that a two-month extension of the payroll tax cut is better than a yearlong one. Come again?
More importantly, let’s look at what they’re all doing – which is to cut one of the last taxes that ought to be cut. Of all the taxes that Congress could choose to trim, they’ve chosen the payroll tax – which ostensibly funds our Social Security nest egg.
Think about that: They’ve decided that the first tax they should cut is the one that helps seniors get by in their golden years. A tax that helps support a retirement program that is already headed for insolvency.
It’s the most damaging, shortsighted tax cut you can think of.
Reason would suggest conservative Republicans are right to push for spending cuts instead. But emotion ruled the day in Washington – along with cynical election-cycle politics.
At its most fundamental level, this election will be about the battle of reason vs. emotion. Democrats will try to convince voters that it’s mean and hurtful not to keep the federal gravy train going – even as the train runs out of fuel, as governments in Europe already are doing. They will paint Republicans as heartless for wanting to cut federal spending (even if it’s to save the Union). Democrats will act as if we can keep spending the way we have been, and that everything will be all right. They’ll ignore the fact that we’re stealing from future generations to do it.
Though it occurred in the last weeks of 2011, the year’s first battle of reason vs. emotion is over. Reason lost.
Of course, it lost when the payroll tax cut became the “easy button.”