GOP's cave adds 2 months to payroll-tax cut, unemployment benefits
CAVES: THEY'RE not just for spelunkers or spineless Beltway Democrats anymore. In a move that packed the political punch of a Rudolph-the-Red-nosed-Reindeer-ready blizzard, House Republicans caved in to an avalanche of pressure last night and agreed to extend both a payroll-tax holiday and unemployment benefits for the next two months.
CAVES: THEY'RE not just for spelunkers or spineless Beltway Democrats anymore.
In a move that packed the political punch of a Rudolph-the-Red-nosed-Reindeer-ready blizzard, House Republicans caved in to an avalanche of pressure last night and agreed to extend both a payroll-tax holiday and unemployment benefits for the next two months.
The conservative lawmakers, led by House Speaker John Boehner, R-Ohio, collapsed under attack from everyone from President Obama to right-wing icons like Karl Rove and the Wall Street Journal editorial board. It stunned pundits used to seeing Democrats crumble in the face of Republican unity.
"It may not have been politically the smartest thing in the world," Boehner said last night in an epic moment of political understatement. "But, let me tell you what: I think our members waged a good fight."
So, what do you need to know before you head back to the mall and your "Bad Santa" reruns?
Q. How does this affect my bottom line?
A. For most households, the biggest thing is the continuation of a temporary 2-percentage-point cut in workers' payroll taxes that began in January to stimulate the economy battered by high unemployment.
The tax, which funds Social Security, had been 6.2 percent of your paycheck, up to $106,800 a year; now it's 4.2 percent. If you make $52,000 a year, the tax holiday has been putting an extra $20 a week in your check. That would have stopped after Jan. 1 - right as the economy is showing some signs of recovery - if the House GOP had continued its rebellion. But now it won't.
Q. How else will the deal help the economy?
A. The deal also allows Americans receiving unemployment checks to continue to get benefits for as long as 99 weeks; if that had expired, more than 2.2 million jobless Americans would have lost their benefits by the end of February. The economic crunch that began in 2008 has seen record levels of long-term unemployment, especially for workers over 50, and economists say that the loss of income from the extended-benefit checks would have also greatly slowed the recovery.
Q. Is the deal announced last night any different from what the Senate approved last week?
A. Slightly. It removed a complicated accounting rule that was aimed at closing a potential loophole but that critics said was a burden on businesses. The minor change is seen as a face-saving move for the House Republicans.
Q. Could they still (bleep) this thing up?
A. Of course they could! It's Washington! Most pundits expect that the two-month extension will pass today using a procedure known as unanimous consent. But stay tuned.
Q. What are the political ramifications?
A. It's rare to hear these words strung together, but this one looks like a total win for Obama as he heads into his re-election year. Since the debt-ceiling debacle of last summer, Obama has sought to position himself as a fighter for the middle class, and the payroll-tax holiday has been a centerpiece of that underlying policy. Many pundits say that the president's economic stance is why his approval ratings have climbed as high as 49 percent, his best since the killing of Osama bin Laden.