The reduction in the payroll tax, by 2% for the year of 2011, had been agreed in the lame duck session in another pressure-filled compromise, for which the Republicans extracted concessions. President Obama saw by mid-year that the economy's recovery remained weak, so he asked for an extension of that tax reduction for another year. The House passed one, a week or so ago, but with riders on it bad enough that the Administration threatened to veto it. The bill could not get to the floor of the Senate, but the Senate did manage to come to an agreement to extend the tax reduction, with some riders:
an extension of unemployment insurance, up to 99 weeks (not the 59 of the House bill);
delaying a provision which would have otherwise reduced payments for doctors providing Medicare services (a perennial fix needed to hold up that costly house of cards);
and a provision requiring President Obama to accelerate the decision on proceeding with a pipeline for sending Canadian oil-bearing sands to the Southeast refineries--Obama sent back the pipeline proposal (known as Keystone XL) for more study on its potential environmental impact.
This agreement was only for two months, but the aim was to keep the tax cut and insurance extension in place so that a longer duration could be negotiated. The main sticking point in the discussion of the tax cut was how to pay for it--the idea of ending the upper-income tax reduction to pay for it was discarded by Republican insistence--the House bill paid for it with cuts to domestic programs. Obama praised the Senate compromise and asked the House to approve it.
Speaker Boehner had given the Senate a nudge to pass something which the House would take up; then, when they passed the compromise he said the House would vote on it.
The Plot Sickens
Boehner has been rebuffed, not once, but twice this week. First, the Senate's bipartisan compromise that he implicitly endorsed was rejected by his party's caucus; then, it rejected his promise that he would allow a vote on the Senate bill. Boehner is hanging on to his leadership by his fingernails; his only hopes to keep this role are: 1) that his Tea Party members will be rejected in the polls in 2012 (which should encourage him finally to stand up to the more extreme views within his party's caucus); or 2) that Eric Cantor enjoys Boehner taking all the heat, with Cantor pulling his strings like a puppetteer.
The House Republicans, clearly feeling the heat of the American public for resisting the extension of the tax cut, found an ingenious way to turn things back to the mode they find more comfortable--applying the pressure and extorting concessions from their opponents. They decided to reject the bipartisan compromise on the basis that the agreement was two months, not 12 months. Then, they constructed the rules such that the votes would be to commit the bill to conference committee, not on the compromise itself.
The debate is instructive on the difference between the two Houses of Congress. Not just the traditional, envious respectful disrespect with which the members refer to the other, but the fundamental difference. With the current Senate rules, and in the absence of a filibuster-proof majority of 60 Senators, the leverage lies with the minority of the minority--in today's Senate, with those few moderate Senators who are willing to work with the Democrats selectively. With the House, all the power is with the majority, but specifically now with the majority within the majority, those radical right-wing Republican House members who seek a very extreme agenda. Those two groups have been placed in direct confrontation by this crisis for the Republicans.
The Democrats' stance now is an interesting one: both their leaders, Nancy Pelosi of the House and Harry Reid of the Senate, are taking the position that they will not appoint their party's conferees now, so this resolution of differences that the Republican position ostensibly seeks would not happen this year. Thus, we have, once again, a game of chicken; the Democrats believe that by continuing to apply political pressure, the Republicans will be forced to come to agreement on terms more amenable to the Democrats--this time.
Truth Behind the Talking Points
When the Democrats say, "The Republicans are to blame for the tax cut not being extended", they mean, "We are happy to be able to give the blame to them, and hope people can understand the convoluted chain of logic which would give it to them."
When the Republicans say, "This two-month extension does not give certainty to job creators", they mean, "We are more than happy to create more uncertainty by blocking any temporary solution."
When the Democrats say, "The Republicans will not permit a clear vote on the Senate bill for fear that it would be approved," they mean, "They don't want a vote against the extension of the tax cut on their records, but we do. We know that, if their discipline is this strong, they would reject the Senate bill now."
When the Republicans say, "President Obama requested the one-year extension, and we are supporting that" they mean, "He changed to the two-month extension when he saw that was all that could be approved now; he and the Congressional Democrats want the 12-month extension as much as we do--in fact, more than we do. The main thing is to turn the pressure around and get control over the other items--how the tax cut would be paid for, getting the pipeline approved."
When the Republicans say, "We want the Senate to do its job and come back," they mean, "we want to pass the hot potato to them so we can go on vacation."
When both sides say, "This extension of the tax cut is needed for our economy's recovery," they mean, "this will not do anything more than help prevent a deterioration, but it's much more important as a political flamethrower to burn the other side."