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Payroll Tax Cut : House GOP Call Harry Reid's Bluff

The battle to extend the payroll tax cuts until the end of this year has reached a very welcome milestone recently. The House Republican leadership announced a clean tax cut extension bill yesterday, that does not include the added unemployment extensions nor the extension of the medicare “doc fix” that has been required since the passage of Obama-care, (which lowered the payments received by health-care providers in order for Obama to claim that the passage of Obama-care would result in the reduction the national debt.)  The GOP is calling Senate Majority Leader Harry Reid’s (LD-NV)  bluff by dropping any demands for offsets to pay for the tax cut extension.  Speaker Boehner is calling for a vote on the bill this week, depending on how the rank and file House Republicans react to it.

Daniel Horowitz offers the GOP some very sage advice in moving forward on the unemployment extensions and medicare “doc fix” after forcing Harry Reid to bring the clean tax cut extension to the Senate floor for a vote: (emphasis added)

They (Republicans) are leaving out the entitlement spending extensions and daring Senate Democrats to oppose their clean tax cut – one that they have “championed” for the past few months.

Going forward, Republicans must stand strong against pressure to slip the entitlement spending into the payroll tax cut deal.  Once they are free from the burden of shooting the hostage (the tax cut), they should negotiate hard for the rest of the package.  They should be guided by the following principles:

  • No extension of UI benefits unless UI is permanently reformed to reflect a real insurance program, not a European-style social welfare program.
  • No extension of doc fix until Medicare is permanently reformed with free-market solutions to bring down the broader costs and preempt the need for doc fix or any payment formula.
  • Both extensions must be paid for with real offsetting cuts during the period of the extension, not over 10 years.
  • We should be working on a long-term solution for the payroll tax now, so we won’t fall into the same trap next December when we will be forced into another ineffectual short-term stimulus type of tax cut.

 

Now if Senate Republicans will just follow the House’s lead and show some backbone in blocking Harry Reid’s sure-to-come counter-proposal, Republicans will gain the leverage needed to deal with the never-ending federal unemployment benefits and the doc fix without adding to the destructive debt-cycle Democrats have put America into over the last 3-plus years of trillion-dollar deficits. Senator Mitch McConnell? You and Senate Republicans are soon to be the next in line to step up to the plate and reinforce the House Republicans clean tax cut extension bill. Don’t strike out. America is watching.

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