How the House GOP Will Win the Battle Over Payroll Tax

Who's winning, who's losing, and why.
Dec. 20 2011 8:28 PM

The House Always Wins

Congressional Republicans are taking a beating for their payroll tax intransigence. That won’t last.

John Boehner
Flanked by House GOP members, Rep. John Boehner speaks following the House's rejection of the Senate's version of a two-month payroll tax cut extension.

Photo by Alex Wong/Getty Images.

Shortly after they cast their votes, squelching the Senate’s two-month extension of the payroll tax holiday, House Republicans tromped over to the Rayburn room and aligned themselves as if posing for a class picture. At 2:15, House Speaker John Boehner arrived, found his place behind a podium decorated with a jobs.GOP.gov sign, and explained why Republicans had decided not to return the Senate’s punt. Instead, they’d chosen to create a new conference committee, to hash out a new compromise, which they hoped to pass at some point.

David Weigel David Weigel

David Weigel is a reporter for Bloomberg Politics

“This is the system that our founders gave us,” said Boehner. “It is as old as our nation and as clear as the Constitution.”

“The president has just said he appealed to you personally,” asked radio reporter Todd Zwillich. “He said, ‘I need John Boehner to help out.’ ”

“I need the president to help out, alright?” said Boehner. The Republicans around him broke up, laughing and cheering. Zwillich asked his actual question: Why not just vote on the Senate bill?

“We’ve already taken up the Senate bill,” he said.

“We just did!” muttered one off-mike Republican.

“We rejected it,” said Boehner, “and we voted to go to conference.”

This is not all true, because the vote to go to conference had automatically nixed the Senate bill, and there would be no separate vote on the two-month punt. Washington will have to negotiate a whole new punt, the fourth compromise in a year designed to please no one. (Count ‘em down: 2010 tax deal, 2011 continuing resolution, 2011 debt compromise with bonus “supercommittee.”) The mission this time around: Save the payroll tax cut, which will spot the average family around $1000; extend unemployment insurance; and reimburse doctors for Medicare patients. The not-so-secret political goals: Make sure that the other party takes the blame for this, and save as many policy sweeteners as you possibly can. Democrats are good at that first part. Republicans are very good at the second.

Oh, it’s not like anyone wants to be in this position. “A lot of us warned last year that we would be in this position,” moaned Rep. Jeff Flake, R-Ariz., talking to reporters between kabuki votes and kabuki debates. “Just this exact position we’re in today, where people are saying, ‘Hey, you’re raising taxes.’ The speaker took pains to say earlier, we were dealt a bad hand. We dealt ourselves this hand last year.”

What happened last year was that the House and Senate extended the Bush tax cuts through Jan. 1, 2013 while adding some sweeteners for Democrats: the payroll tax cut and 13 months of unemployment insurance. Republicans got little blame for this, as it was the last act of an expiring Congress run by Democrats.

The blame is coming in now. Serendipitously enough, Tuesday’s standoff happened right after a new CNN poll pegged Barack Obama’s approval rating at its highest level since May, when the killing of Osama bin Laden gifted him with a bounce. The poll asked whether voters had more “confidence in President Obama or in the Republicans in Congress to deal with the major issues facing the country.” In March, Obama had a 5-point lead. This month, that figure has zoomed up to 19 points. Bill Clinton didn’t have a lead that big when the Gingrich Congress was humiliating itself by impeaching him.

None of the obvious storylines to come out of this latest congressional skirmish look all that good for Republicans. McConnell punts the fight for two months; House Republicans revolt! The Tea Party overrules John Boehner, yet again. Tea Party members trash the Senate. (“They get distracted with their bingo night,” snorts Rep. Jason Chaffetz, R-Utah.) In the end, we’re left with two ugly narratives for the GOP: Republicans are holding tax relief hostage, and Republicans will raise taxes on working people.

The Republicans, predictably, resented that characterization. “The American people are being as played as pawns,” suggested Rep. Tim Scott, R-S.C., co-president of his freshman class. “The Democrats are our opponents,” said Rep. Stephen LaTourette, R-Ohio. “The Senate is our enemy. I don’t know any House Republican who can’t go home and say, ‘I don’t know what that loony Senate is up to.’ If you can’t say that, you’re in the wrong business.”

LaTourette, a member of the 1994 class, was well aware of the spin and chaos that the three fights had produced. Yes, endangered Republicans like Sen. Scott Brown were siding with the 2-month plan. Republicans were in disarray. “Sure,” said LaTourette, “but who cares?”

The cynic’s bet is that the story of GOP dysfunction won’t matter, so long as there’s eventually some compromise. Eyes on the prize: If the other side blinks, and it always does, what can Republicans get out of them?

They want a few things. The House’s version of the one-year extension included reforms that Republicans plan to stick to. On unemployment, the GOP wanted to cut the maximum duration from 99 weeks to 59 weeks and add in some new requirements. Beneficiaries who didn’t have GEDs would have to try to get them. States implementing unemployment insurance could require drug tests. These and other reforms were necessary, according to LaTourette, because “you couldn’t get 218 votes that extended unemployment benefits without reform.” In his district, employers were tired of having jobs open but lacking workers with the skills to fill them. Here was a chance to fix that.

Also among the House GOP’s demands: a hold on new EPA rules governing boilers, and an expedited decision of the Keystone XL pipeline. They were taking those demands to the conference committee. I asked Rep. Fred Upton, the chairman of the Energy and Commerce committee and one of the people going to conference, how these were pertinent.

“Part of our argument of including it in the broad package,” he said, “is—look, we're looking at extending unemployment benefits. But frankly, people would rather have a job than get unemployment benefits. The Keystone plan, which has been sitting on the desk for three years—20,000 shovel-ready jobs, $7 billion private investment project—it's ready to go. The boiler rule impacts 200,000 boilers, about that many jobs as well. Ready to go. It's had bipartisan support, and we know it has bipartisan support in the Senate.”

Yes, the Republicans are coming off as intransigent. But Democrats want to re-elect the president, so they’ll ultimately give up a lot to extend a tax cut and unemployment benefits. In the meantime, Republicans can figure out what leverage they have to weaken the welfare state. Despite how it looks right now, it doesn’t make sense to doubt them. After all, they’ve had a lot of practice at this.

  Slate Plus
Slate Picks
Dec. 19 2014 4:15 PM What Happened at Slate This Week? Staff writer Lily Hay Newman shares what stories intrigued her at the magazine this week.