My Thoughts on the Recent Payroll Tax Scuffle

Here are my thoughts on the recent payroll tax cut scuffle. The dirty little secret about the so-called "standoff" over the payroll tax cut is that the Republicans in the House were clearly right about wanting to extend the payroll tax cut for at least a year instead of the 2-month extension in the Democratic Senate bill. A 2-month payroll tax cut is laughable. Payroll software developers will barely have time to modify their programs to reflect the changes before those changes expire. It will have zero impact on the economy, since employers don't hire people for 2 months (or even for a year). Their hiring decisions are based on planning years ahead, not weeks or months. Of course, all such an "agreement" does is ensure we will have exactly the same argument again in 2 months, when once more the payroll tax cuts will expire and Congress will be scrambling to once more extend them. What kind of way is this to run a government?

OK, so maybe the House Republicans aren't exactly "right" on the policy aspect of this. Probably the right thing to do is to expose the fact that this supposed tax cut is really just a handout of about $19 per paycheck to middle-class employees -- taking money out of the Social Security trust fund while doing nothing to stimulate long-term economic growth. But what they are proposing makes much more sense than the 2-month extension passed by the Senate. And yet, everyone seems to agree that the GOP has thoroughly lost the debate and the Democrats have seized the tax-cutting mantle.

I'm not saying that the House Republicans couldn't have done better. They clearly walked into a political trap set for them by Obama and the Democrats. But there is still no way that the Democrats should come out smelling like a rose on this issue when their position is utterly ridiculous, from a substantive policy perspective. Obama's poll numbers have actually gone up and the Democrats are now perceived more favorably than Republicans on the issue of taxes. This is because the press has not covered this issue accurately. They have not helped Americans to understand the real substance of this debate and why a 2-month extension bill is not worth the paper it's written on. And the American people are also to blame because they have blindly accepted what has been spoon-fed to them by the media and by political soundbites. They have been bought off by simplistic solutions and easy handouts.

This is where I disagree a little bit with some other conservatives, who want to cast most of the blame on John Boehner and the Republicans in Congress. I don't exactly think Boehner is the brightest bulb in the box and I've been disappointed with a lot of his compromises in the past with Obama. But what exactly was he supposed to do in this situation? He tried to take a stand against the ridiculous 2-month tax cut bill passed by the Senate, but was pounded by the media. Even conservative talk radio hosts criticized his boneheaded political move of picking a fight in an election year that he could not win (from a political perspective). Then, he gave in and agreed to the Senate bill, and conservative talk radio hosts blasted him for not standing for his principles! It is easy for arm-chair pundits to attack elected Republicans for being politically stupid, or unprincipled, or insufficiently eloquent. But these Republicans are stuck in a morass called Washington, DC, which will often make you look politically stupid for standing on your principles and will reward unprincipled politicians. While very few possess the eloquence of Ronald Reagan, many congressional Republicans are capable of making a half-decent case for their positions if given the opportunity to speak and the audience to listen. But it is very hard for them to get their message across, given the 24/7 news cycle, a political culture where everything is reduced to 30-second soundbites, the hostility of much of the mainstream media, and the indifference of much of the public. They will never be able to make their case as effectively as Obama, with his gigantic bully pulpit and a highly-sympathetic press. It's always easy to blame politicians, but maybe it would be more accurate to blame the voters who repeatedly let themselves be swayed by empty rhetoric and deceitful promises. Not to mention a biased media that manipulates those voters into falling for such rhetoric.

Eleven Reasons For Hope

I found this National Review article by Ramesh Ponnuru very encouraging, especially since Ponnuru is generally rather pessimistic and even critical of Republicans, whom he often views as weak and ineffective. He gives 11 reasons why 2011 should be significantly different (and better) for the Republicans in Congress than it was for them the last time they took over the House in 1995.

It is always wise not to put your trust in politicians or political parties, as they will always disappoint at some level. Nevertheless, I have to admit that I am cautiously hopeful and optimistic for the new Congress. So far, I am quite impressed with John Boehner, the new Speaker of the House. While I don't have a great deal of knowledge about him, I know he has been a reliable conservative vote in Congress for many years. In 20 years of service in Congress, he has never requested an earmark for his district and was instrumental in getting the Republican House conference to ban earmarks. He is a genuine American success story, growing up in a working-class family and working his way to the top through hard work. As a former small business owner, he understands how business works. He has shown a lot of humility since the election, acknowledging that Republicans made many mistakes the last time they were in the majority and insisting that he does not want to repeat those mistakes. I was impressed with his "hell no" speech on the House floor right before the health care vote as well as his leadership in opposing the bill, and I thought his emotional speech on election night was sincere and humanizing.

The House has not just a Republican majority, but an outright conservative majority now. In the Senate, the GOP has a conservative core of at least 41 senators who should be able to effectively filibuster the worst pieces of legislation. Mitch McConnell, the GOP Senate leader, is a political insider with a long history of pork barrel spending, but even he seems to be getting the message from the election. He recently agreed to support a ban on earmarks for the GOP Senate conference as well, which has now passed with almost unanimous GOP support.

Certainly the best we can hope for over the next two years is an uneasy stalemate. But Obama will no longer be able to force his agenda through, and the Republicans will have a chance to offer some alternative ideas and solutions. If they do a good job, they may be able to put the GOP presidential nominee in a good position to run against Obama in 2012. That is our only hope for repealing ObamaCare.

Back in the U.S.S.A.

The U.S. House of Representatives officially put our country on the fast track to nationalized health care last night, passing the Senate health care bill by a vote of 219-212.

House Minority Leader John Boehner, who has fought this legislation tooth-and-nail, gave an impassioned speech on the House floor right before the vote. Here are some excerpts:

Mr. Speaker and my colleagues, I rise tonight with a sad and heavy heart. Today, we should be standing together, reflecting on a year of bipartisanship, and working to answer our country’s call and their challenge to address the rising costs of health insurance in our country. Today, this body, this institution, enshrined in the first article of the Constitution by our Founding Fathers as a sign of the importance they placed on this House, should be looking with pride on this legislation and our work. But it is not so. No, today we’re standing here looking at a health care bill that no one in this body believes is satisfactory. Today we stand here amidst the wreckage of what was once the respect and honor that this House was held in by our fellow citizens. And we all know why it is so. We have failed to listen to America. And we have failed to reflect the will of our constituents. And when we fail to reflect that will – we fail ourselves and we fail our country. Look at this bill. Ask yourself: do you really believe that if you like the health plan that you have, that you can keep it? No, you can’t. In this economy, with this unemployment, with our desperate need for jobs and economic growth, is this really the time to raise taxes, to create bureaucracies, and burden every job creator in our land? The answer is no. Can you go home and tell your senior citizens that these cuts in Medicare will not limit their access to doctors or further weaken the program instead of strengthening it? No, you cannot. Can you go home and tell your constituents with confidence that this bill respects the sanctity of all human life, and that it won’t allow for taxpayer funding of abortion for the first time in 30 years? No, you cannot. And look at how this bill was written.
Can you say it was done openly, with transparency and accountability? Without backroom deals, and struck behind closed doors, hidden from the people? Hell no, you can’t! Have you read the bill? Have you read the reconciliation bill? Have you read the manager’s amendment? Hell no, you haven’t!