The battle over the payroll tax cut

What happened

The White House and congressional Republicans capped one of the most contentious years in American political history this week with another showdown over a proposal to extend this year’s payroll tax cut for 160 million workers and employers. House Republicans passed a bill that gave Obama and the Democrats the tax cuts they wanted, but tied them to a host of unrelated provisions, including one requiring President Obama to decide on the construction of the Keystone XL pipeline from Canada to the Gulf Coast within 60 days. The White House had previously said it would delay that decision until 2013. Obama threatened to veto the bill, but it had no chance of passing the Democratic-controlled Senate with the provisions intact. Senate Democrats were insisting on restoring a provision to pay for the tax cut by imposing a 1.9 percent surcharge on incomes over $1 million. As The Week went to press, the two sides were once again at an impasse, raising the possibility of a government shutdown.

The latest congressional battle over taxes came as President Obama sought to frame the 2012 elections as a choice between his advocacy for the middle class and Republican insistence on protecting the interests of the wealthy. “We are at a crossroads,” he said, during an interview on 60 Minutes this week. “Do we want a society in which we have a tax code where everybody’s paying their fair share?... [or] an economy in which you’re on your own and big corporations can write their own rules?” Republican presidential candidate Newt Gingrich accused the president of advocating “class warfare and bureaucratic socialism.”

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What the editorials said

So this is how 2011 ends, said the Los Angeles Times, with Congress once again “resorting to the bureaucratic equivalent of death threats.” Earlier this year, Republicans threatened to shut down the government unless Democrats agreed to cut spending. Now, Democrats are doing the same thing over the “wrongheaded provisions” in the payroll tax cut bill. But “this sort of hostage-taking is repulsive no matter who’s doing it.” Congress must agree on a long-term plan to promote growth and reduce the deficit in 2012, or face another year of “stumbling from impasse to impasse.”

But it was Obama who started this payroll tax cut fight, said The Wall Street Journal, by insisting it be paid for with a millionaires’ tax. This was just a transparent ruse to put Republicans “on the class-warfare spot,” and boost the president’s re-election campaign. Republicans sensibly want to offset the $250 billion cost of the payroll tax cut with spending cuts and job-creating initiatives like the Keystone XL pipeline. Sadly for the nation, Obama and his party prefer to focus on “income redistribution and politics.”

What the columnists said

Class warfare is all Obama has left, said Charles Krauthammer in The Washington Post. Three out of four Americans now believe that the country is on the wrong track, the country is $15 trillion in debt, and Obama’s signature achievements—the failed $860 billion stimulus, Obamacare—are more likely to “be the stuff of Republican ads” than of Democratic ones. So of course the president is going to run on the “crude populism” of higher taxes for the rich.

There’s nothing crude about addressing the nation’s rising inequality, said John Cassidy in NewYorker.com. In recent months, the Occupy Wall Street protests focused the nation on such valid issues as “bankers’ pay, tax evasion by rich people, and corporate lobbying.” That’s why Obama is trying to force House Republicans into “revealing moments” like the feud over the millionaires’ surcharge, said Steve Kornacki in Salon.com. Portraying the GOP as champions of the rich is the best way to rally the “99 percent against them.”

But most independent voters don’t care about how much the rich make, said Doyle McManus in the Los Angeles Times. They’re more concerned about how badly the middle class is doing. What Obama has failed to do so far is convince moderates that “unequal income is hurting economic growth,” or lay out any real plan to revive the middle class. Luckily, Obama “still has almost a year to fill in the blanks.”