"A government big enough to give you everything you want is strong enough to take away everything you have."

Tuesday, December 27, 2011

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.

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