Bipartisan legislation extending payroll tax relief for working Americans will now include a fix secured by House Republicans that ensures small businesses, already struggling in the current economy, won’t face added confusion and compliance costs. Without this fix, employers would have been hit with a costly new reporting burden that independent tax experts have warned against and employees’ tax cuts would have been in doubt at a time when millions of Americans are already out of work.
Oh thank goodness he held out!
I don’t think anyone believes this pathetic little band-aid, but they had to throw something in so the Republicans could save face and this was it.
Greg Sargent points out that it was a very unusual situation:
This is a very significant victory for Obama and Dems, and it stands as an all too rare example of what can happen when they draw hard lines and refuse to budge, secure in the knowledge that the public is on their side. That said, a few caveats are necessary. First, Dems already made significant concessions just to get to this point: They dropped the millionaire surtax (which had very broad public support) and agreed to an expedited decision on the Keystone XL pipeline (though it remains unclear what this means in practice, both substantively and politically).
Second, this tough stand by Dems was enabled by a unique turn of events. Either through a failure of communication among GOP leaders or a bad misjudgment of sentiment in the House GOP caucus, a bizarre situation developed which gave Dems all the leverage and left the House GOP with none. This upended the dynamic we’ve seen for the last year, in which Dems had regularly been placed on the defensive and Republicans held much of the leverage, due to their apparent willingness to flirt with true disaster in order to get the concessions they were demanding. In this case, the Senate passed the extension with overwhelming bipartisan support — putting virtually every GOP Senator on record in favor of the proposal, before they went home for the holidays — even as the House GOP leadership was confronted with a rebellion in its caucus that suddenly left the House GOP isolated. This strange turn made it far easier for Obama and Dems to drive a wedge among Republicans and ensured that pressure on House Republicans would only mount from within their own party.
Third, this is the only piece of Obama’s jobs plan that Dems have been able to pressure Republicans into supporting. As a result, the basic overall dynamic may remain unchanged: A bad economy next year; Congressional gridlock; rising public disenchantment with government; and an incumbent running for reelection after failing to prevail on Congress to pass many of his major proposals to fix the economy. And forth, on the payroll tax cut itself, there’s a whole new set of talks set for January