Feature

Payroll tax cut in limbo

House Republicans unexpectedly rejected a bipartisan Senate compromise that would have extended the tax cut for two months.

With the clock ticking, Congress deadlocked this week over extending a payroll tax cut affecting 160 million Americans. House Republicans unexpectedly rejected a bipartisan Senate compromise that would have extended the tax cut for two months beyond Dec. 31 to buy time for talks on a longer-term agreement. House Speaker John Boehner rejected that short-term extension as an unacceptable stopgap and insisted that the Senate return to Washington from the holiday recess for more negotiations. President Obama responded by calling the Senate bill the “only viable way” to prevent a Jan. 1 tax hike. Unless Congress acts before New Year’s Day, payroll taxes will rise by 2 percent, doctors will see a 27 percent cut in their Medicare reimbursements, and 2 million people will lose unemployment benefits.

This is not the GOP’s finest moment, said The Wall Street Journal in an editorial. Party leaders “thoroughly botched the politics” of this debate, achieving the “small miracle” of letting Obama position himself as the defender of tax cuts in an election year. House Republicans should “cut their losses and find a way to extend the payroll holiday quickly.”

But they’re right to oppose the Senate’s punt, said National Review. The 60-day tax-cut extension is an “irresponsible and unworkable” strategy that will wreak havoc on small businesses. The House already passed a yearlong extension, but Senate Democrats cynically crafted a short-term deal because they didn’t like the House bill’s provision to pay for the tax cut with responsible spending cuts and reforms instead of “a surtax on job creators” who earn more than $1 million a year.

It’s long been clear that Congress isn’t concerned with governing anymore, said The New York Times, only with “assigning blame or avoiding it.” We’ve had a long year of “dangerous standoffs, led by extremist House members,” but this “truly ugly legislative wreck” will have real economic consequences for millions of Americans. The current partisan gridlock needs to end. “There are too many paychecks at stake.”

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