If this month’s chaos over the payroll tax extension seems familiar, it should. We had pretty much the exact same fight last year, which ended December 17th when President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. That bill extended the Bush tax rates for two years, extended a slew of Obama stimulus tax loopholes for two years, extended Unemployment Insurance for one year, extended the Alternative Minimum Tax patch for one year, extended a slew of other tax loopholes (like ethanol and railroad credits), and created the payroll cut everyone is fighting over today. Total price tag of that 2010 deal: $858 billion. That is larger than Obama’s first stimulus.
For all the attention that the payroll tax rate is getting, no one seems to care that the usually bipartisan AMT patch, and the rest of the one-year extensions, are all set to expire too. Neither the House nor Senate payroll tax bills do anything for the rest of the tax extenders. That means that in addition to the 160 million Americans who might see their payroll taxes go up if the Senate does not agree to a one-year fix, another 21 million Americans will see their income tax burden go up as well.
Forcing Americans to guess what federal tax policy will be every December is no way to run a modern competitive economy. Two-month tax extensions are even more ridiculous. In order to invest, budget, and plan, Americans need the federal government to provide some policy stability. The Obama administration has failed to provide that. The real culprit here is the Democratic Senate, which has failed to pass a budget in 967 straight days.
Ah, you may say, but Senate Republicans could filibuster any Senate Democrat budget. False. Budget resolutions cannot be filibustered. Democrats have simply been unable to put their long-term tax and spending policy preferences on paper since Obamacare became law. As a result, Americans have been forced to suffer under the tyranny of constant tax policy uncertainty.
Around the Bigs
The Washington Post, Congress leaves town with an uneasy stalemate and looming payroll tax hike: The House of Representatives voted 229-193 to reject a two-month extension of current payroll tax rates. Speaker John Boehner, R-Ohio, has appointed negotiators for a conference committee to work out a compromise with the Senate bill, but Majority Leader Harry Reid, D-Nev., is refusing to negotiate.
The Wall Street Journal, China Hackers Hit U.S. Chamber: Chinese hackers breached the computer defenses of U.S. Chamber of Commerce gaining access to everything stored on its systems, including information about its three million members.
The Washington Examiner, Occupy DC among last camps standing: The Freedom Plaza Occupy DC encampment is erecting three 30-foot Army surplus tents, complete with wooden floors, despite the fact that their permit expires December 31st. Occupiers say they’re expecting the National Park Service to renew their permit for another two months.
The Washington Examiner, Three trains damaged, 300 riders trapped after piece falls from Metro train: About 300 Metro riders were stuck underground waiting in dark rail cars for more than two hours Tuesday morning after a piece of a train broke off, damaging two following trains and bringing the Blue and Orange lines to a standstill.
Campaign 2012
General Election: For the first time in Public Policy Polling‘s monthly national polling, Mitt Romney has taken a lead over President Obama, 47% – 45%.
Johnson: Gary Johnson admitted yesterday that he is planning to drop out of the Republican primary and run for the nomination of the Libertarian party.
Gingrich: Newt Gingrich asked Mitt Romney to ask the Super PAC supporting his candidacy to stop airing attack ads against him Tuesday. “My goodness, if we coordinate in any way, shape or form, we go to the big house,” Romney replied. Gingrich claims the ads are full of falsehoods. Romney Super PAC spokeswoman Brittany Gross responded, “The truth hurts.” The Washington Examiner‘s Byron York reports that the FEC says Romney could tell the Super PAC to pull the ads.
Virginia: Morton Blackwell tells National Review that Newt Gingrich, Mitt Romney, Ron Paul, and Rick Perry are all expected to turn in enough signatures to get on Virginia’s March primary ballot.
Iowa: Combined, the Mitt Romney campaign and the Mitt Romney Super PAC, Restore Our Future, will spend $971K on television advertising this week. Rick Perry will spend $820K and Newt Gingrich will spend just $222K.
Righty Playbook
The Enterprise Blog‘s James Pethokoukis identifies the 5 worst economic ideas of the year.
RedState‘s Leon Wolf suggests Gary Johnson should run for the U.S. Senate seat open in New Mexico as a Republican instead of running as a third party Libertarian candidate for president.
At The Corner Veronique de Rugy makes the case for Occupying the AARP.
Lefty Playbook
The New York Times‘ Nate Silver suggests President Obama’s job approval ratings rise in two polls is due to improving economic expectations.
The Washington Post‘s Chris Cilliza says the latest Washington Post poll shows Obama has some “middle-class momentum.”
Paul Krugman declares Politifact dead after the named Democrat attacks on Paul Ryan’s budget their ‘Lie of the Year.’
