Those who contend that Republicans can always find a way to screw up a sure thing certainly got evidence of it this week. As the Wall Street Journal put it:
GOP Senate leader Mitch McConnell famously said a year ago that his main task in the 112th Congress was to make sure that President Obama would not be re-elected. Given how he and House Speaker John Boehner have handled the payroll tax debate, we wonder if they might end up re-electing the President before the 2012 campaign even begins in earnest.
The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play.
Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he's spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible.
Since ending a tax holiday amounts to a tax increase, naturally a one-year extension would be far better than a two-month one. But show of hands here: Anybody think this will be offset by cuts in spending rather than merely adding it to the debt? Yeah, me either.
Comments
I don't blame you for changing the subject a bit there at the end. The fact is the Republicans have just labeled themselves as the tax-cutters for millionaires and tax-hikers for working people. It may not be fair, but that's how it will be perceived. You still interested in that bet, Tim?
What I find frustrating and disappointing is what a muddled mess this has become. This guys lies (along with the media) make Nixon look like a Choir Boy.
You have a terrible piece of legislation to begin with, (playing semantics with the word tax, robbing peter to pay paul, etc) that ended up in the Republicans lap as a 2 month payroll nightmare for EVERY business if it passes (ask your human resources dept what a clusterfark the software changes will be).
So, yeah, I give props to Obambi and the dems for the political move I guess, they have deception down to an art form, we'll see how many people really buy it. It should be painfully obvious now to even the most ardent democrats that are business owners (big and small) this guy and his agenda is gonna killing them. He's being touted by the media disciples as the hero of the "middle class" at the very same time he's pulling the rug out from under them.
He may have won the messaging battle on this one, but the taxpayers are the ones that lose the war when they finally realize this yutz has spent us into what will become a third world economy.
When ideology trumps simple math the end result is not pretty.
As many know I have supported Repealing the SS-OASI tax (currently 10.6%) since 1975. I believed the tax reduced the US Savings rate, was instrumental in the term of a mortgage rising from 10 years to now 30 years, reduced ability of people to pay for things which was compensated by banks issuing credit cards to maintain the appearance of standard of living and squeezing out general revenues by lowering federal income taxes to compensate workers for higher payroll taxes.
Now economists are saying not extending the payroll tax holiday would increase unemployment and lower economic growth. So if 2% is good for the economy, why not 10.6%?
In reality the money to pay for the payroll tax holiday is borrowed money that no one who benefits from the tax holiday today will actually be paying the cost in the future. The worker keeps $1,000 and an IOU (Borrowed money) is placed in your children/grand children's pockets. I hope all those who are benefiting from this takes the time to think their kids. Maybe what you should do i actually set aside the full amount so they can pay back the lenders when the treasury notes come due.
"I believed the tax reduced the US Savings rate, was instrumental in the term of a mortgage rising from 10 years to now 30 years, reduced ability of people to pay for things which was compensated by banks issuing credit cards to maintain the appearance of standard of living and squeezing out general revenues by lowering federal income taxes to compensate workers for higher payroll taxes."
Thirty year mortgages have been standard for about 60 years. In the 1950s, many mortgages were 15 to 20 years. How long were 10 year amortized mortgages common? Until the 1930s, most mortgages ran one year, few were more than five years, and you didn't make monthly payments, you gave your banker interest and a little principle, and begged to have the rest rolled over.
And if you looked at him crosseyed, he foreclosed.
For decades, Japan was eating out lunch, but mortgages there are typically written for 100 years. A tax that's been around since the 1930s didn't stretch the amortization period in the 1960s, especially when you consider that the Social Security tax saved us money, as keeping retirees in their homes cost us far less than the cost of the poor houses counties ran before Social Security existed.
Harl I must be getting old. 60 years takes us back to 1951.
My parents first home bought I believe in 1951 was a ten year term and required 25% down.
The second mortgage my parents had was a 15 year in 1963 that required 20% down.
Growing up I never heard of anyone having a 30 year mortgage until the early 70's.
"Social Security tax saved us money, as keeping retirees in their homes cost us far less than the cost of the poor houses counties ran before Social Security existed."
I am not sure I agree with this. The majority of elderly lived with family. It is far cheaper to finance maintenance, taxes, utilities of one home over two separate homes. Add in the expense now of children going over to help their parents adds additional cost and reduces time for other things. In addition, the elderly were the strength of a family. They passed on history, stories and provided baby sitting. I believe elderly parents who lived with family members help to make families strong.
I also believe that when SS was passed many elderly thought they were now able to live independently from others. They underestimated the cost - SS-OASI increased benefits by nearly twice that of inflation between 1950 (77%) to 1972.
During the 60's and even into the 70's economists identified the drop in Savings rate and attributed it to the payroll tax. They then justified the drop by adding the payroll tax (government savings) to the US savings rate. This changed when SS-OASI exhausted its trust fund in 1983 and had to borrow funds to cover OASI's benefit costs from Medicare and DI's trust fund (no longer an option).
my 1 cent's worth.
These discussions of the economic advisability of various tax-cut extensions are interesting, but the real impact of the actions of House Republicans is political.
Rightly or wrongly, the voters see a party that will do anything to preserve a tax cut for millionaires and billionaires, but won't do the same for working people. People will remember that at their polling places.
You'll notice that Obama, who had seemed so vulnerable, is steadily getting stronger in the polls, handily beating every declared Republican if the election were held today. I think the GOP will be lucky to hang onto Congress if they keep this silly Grover Norquist/Tea Party stuff up.
Littlejohn, I believe you're misinterpreting the polls. Obama is not getting stronger; the GOP field is becoming weaker.
Tim thinks a ham sandwich can beat Obama, but when voters get a whiff of a 35-year-old ham sandwich, they decide Obama isn't so bad after all. We don't have to be thrilled with Obama to vote for him; we only need to fear the alternative more.