In the waning days of 2011, Congress is doing its best to reaffirm the perception that it is wholly incapable doing anything, at all. The debate over whether to extend the payroll tax cut no longer just involves the merits of its extension (the economy is awful and increasing taxes is a bad idea), but who will be perceived as having the upper hand in the negotiations.
That’s what our congressmen and women care most about now: maintaining their vainly conceived images rather than the actual substance of any piece of legislation. And now the clock is ticking and many of us are in line for a noticeable tax increase next year if no bargain is reached.
The payroll tax, or the wages withheld for Social Security and Medicare, was reduced this year by 2 percentage points, from 6.2 to 4.2 percent, as part of a deal struck between Democrats and Republicans to extend the Bush tax cuts.
What’s unique about this debate is that both parties largely agree the payroll tax cut should be renewed, but the disagreements lie over everything from how to pay for it to what incentives should be included in an agreement. In other words, the argument is no longer over the need for legislation, but who wins the most en route to that end.
“It’s a classic moment of this Congress,” Sen. Joe Lieberman, I-Conn., said, “which is both parties are for something and we can’t figure out how to get it done.”
I’m not sure classic is the word I would use. Maybe mortifying? Discombobulating? What’s clear is that it’s reoccurring.
President Barack Obama and Democrats have proposed paying for the payroll tax cut extension with a surtax on annual income of more than $1 million. Montana Sen. Max Baucus maintained his support for the legislation, pointing out that allowing the tax cut to expire would hurt the economy. He even sent out an e-mail detailing how much an average household’s taxes would go up in each Montana county.
In case you’re wondering, an average Flathead County family will pay $1,311 more next year in taxes if a deal isn’t reached.
House Republicans have their own plan that includes a smorgasbord of extras necessary for them to extend the payroll tax cut. Those include easing environmental restrictions, shortening the duration of unemployment benefits, and – in what is perhaps the most contentious item – expediting the approval of the Keystone XL pipeline, which will run from Alberta, Canada, through Montana and five other states on its way to an oil refinery in Texas. The GOP even gave the nearly 370-page bill a fancy name: “Middle Class Tax Relief and Job Creation Act of 2011.”
Montana Congressman Denny Rehberg introduced legislation earlier this month that would require U.S. Secretary of State Hillary Clinton to issue a permit within 60 days to allow the Keystone XL pipeline to move forward. Now that bill is tucked in the Republicans’ payroll tax plan.
The Obama administration left itself open to criticism after it punted on a decision on whether to approve the 1,700-mile pipeline until early 2013, instead of facing criticism from either environmentalists who oppose it or labor and business groups who support it. He took the easy way out until after the election.
Meanwhile, Democrats have branded the proposal part of the GOP’s pursuit of an “extremist agenda.” Republicans counter that the bill is their final offer. So we’re in familiar territory. There are deadlines looming, a holiday approaching and an important piece of legislation is at an impasse.
Except, unlike similar clashes in Washington in which we treat much of the grandstanding as a sideshow starring characters in suits they hope mask their ridiculousness, this one will actually affect almost all of our pocketbooks. A lot.
Which isn’t funny.