Wednesday, December 21, 2011

Substance being ignored for 'politics' in payroll tax debate (UPDATE)

"The entire political establishment is aligned against them, which means the entire political establishment is aligned against congressional conservatives. The Senate Republicans, the Wall Street Journal editorial, the Democrat establishment, the Democrats in the Senate, the Democrats in the House, they are all lined up, and over this one thing: Whether or not we're gonna have this payroll tax cut for two months or for a year."

Rush pretty much devoted the entirety of Wednesday's program to this hoax of a payroll tax holiday and the typical establishment reaction displayed among the pundits, with Republican operatives running to the Wall Street Journal and Politico alike, betraying any principle for the Washington political games that we've unfortunately become accustom to witnessing.  Yet, even when it's acknowledged that House Republicans are standing on principle above politics, The Hill's A.B. Stoddard piles on with the rest, surmising that principle is a loser and the people are too stupid to know what's going on or understand the difference between these two ideals for that matter.

Bad politics? People want their thousand dollars? Thanks, Bret, for pointing out that we're only talking about $166 over two-months that can't even logistically be implemented by businesses. Technically, put a sock in it, Stoddard.

With all of these establishment types, style trumps substance. This is the essence of that WSJ piece, which has surmised that we've already lost the tax debate to Obama simply over this payroll tax extension fiasco, so House Republicans should just cut their losses, submit and move on (to the next defeat, I guess in a couple of months). But while the establishment cowards are busy throwing their hands up and running in circles, what they, nor the media, nor nearly enough politicians involved in this, aren't telling you, are the real implications of this 2-month deal.

First and foremost, raiding the Social Security trust fund (if we're going to pretend that there is one) is NOT a tax cut! Cutting a percentage of the payroll taxes to promise citizens a tax holiday is only cutting contributions to their own Social Security, Medicare/Medicaid savings. Now, as I stated in the prior post, I'm not a proponent of the current systems, but until we enact something better, payroll taxes are the ONLY source to fund these institutions. So, who's really throwing granny off a cliff?

Secondly, why did Republicans submit to having the payroll tax holiday extension in the same bill as an unemployment extension in the first place? Daniel Horowitz wrote an interesting piece at RedState that, although buys into the preface of a the tax debate with Republicans taking the blame (pretty much the WSJ piece), makes an interesting point, particularly on the part of McConnell and Senate Republicans:

Last week, Republicans secured superior leverage by becoming the first body to actually pass an extension, while the Senate was unable to pass its own bill. However, Mitch McConnell launched a broadside on his party by agreeing to a lousy two month extension – one that is totally unworkable in the real world.

We need to stop forcing Republicans to face the grim choice between blocking a tax cut and fighting against more entitlement and deficit spending.

Horowitz calls on House Republicans to pass a clean 12-month extension without any strings attached, leaving the other provisions that conservatives want to leverage within a separate bill against the more undesirable Democrat entitlement spending, namely the unemployment extension.

The third and final point I'd like to make has perhaps been the most obscured part of the Senate's version: who is paying for the two-month extension of this payroll tax holiday? AP reported in a brief article over the weekend that "the cost is being dropped in the laps of most people who buy homes or refinance beginning next year."

The typical person who buys a $200,000 home or refinances that amount starting on Jan. 1 would have to pay roughly $17 more a month for their mortgage, thanks to a fee increase included in the payroll tax cut bill that the Senate passed Saturday.

See the shuffling around going on here, folks? Obama and Democrats want you to feel so gracious that they've given middle class families $19/week ($76/month) back, when they're likely adding at least $17/month of that back into some of those same middle class families' mortgages.  Also, if you take the difference, around $59/month, is that really worth mortaging away your retirement contributions?  And that's all on the assumption again that businesses will even be able to implement this sham over two months.

Furthermore, a two-month payroll tax holiday extension will do absolutely nothing for the economy, nor will it change the fight over tax & spend policies in a mere couple of months.  This is simply a political game pushing the debate into the 2012 election year, as Obama prefers it.  He needs anything to distract from his failed policies, and the media, including the Republican Establishment's own, seem all too willing to lend him a hand.  Now WE wonder who might end up re-electing the President before the 2012 campaign even begins in earnest, Wall Street Journal.

As Rush elaborated, we stand for principle over politics, and the establishment can't stand it.  That's what all the hullabaloo you're hearing today is about.

UPDATE: A day later and 'just in time for the holidays', the inevitable cave by the Republican leadership wraps up a year of surrendering to the optics of a Democrat-controlled Senate, presidency and media. So this is what we voted for last November? Hardly. But the current Speaker just hasn't figured out how to outflank the dementia-riddled leader of the Senate. That says a lot about the dire state of our leadership, doesn't it? Eh, least Dear Leader can now confidently head off to Hawaii for the holidays.

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