Economy

GOP Surrenders on Payroll Tax Cuts

After realizing that the Tax Cut Party looks really foolish when they oppose tax cuts, the Republicans have decided to drop their ransom demands and perform a series of face-saving maneuvers to pass a "clean" extension of payroll tax cuts for the remainder of the fiscal year.

Facing emboldened Democratic negotiators and a thin calendar, House Republican leaders have offered to extend the payroll tax holiday through the end of the year without paying for it.

“Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue regarding offsets, unemployment insurance, and the ‘doc fix,’” said GOP leaders in an official statement Monday afternoon. [...]

Republicans are poised to become the face of a middle class tax increase if the holiday expires. Democrats, aware they hold the upper hand, have refused to finance the tax cut — $100 billion over 10 months — on GOP terms. That’s left Republicans with three bad options: pay for the cut at least in part by raising taxes on wealthy people or corporations, in violation of their anti-tax pledge; pay for the cut using budgeting techniques Republican rank and file members abhor; or don’t pay for them at all.

It's not as if the Republicans had a problem with not paying for programs in the past. The Bush Tax Cuts. Two wars. Prescription drugs. Republicans are the kings of deficit spending.

Why throw a fit now? Because the economy is improving, and that's bad news for Republicans in an election. Your anguish is what they run on, not your hopes.

Unfortunately for them, and fortunately for America, President Obama and the Democrats have out-played them every step of the way in this debate.