The best way to end the payroll tax standoff
By Editorial Board, Washington Post, Published: December 21
JUST WHEN YOU thought the mess in Washington couldn’t get any messier comes the year-end snafu over the payroll tax, unemployment insurance and other supposedly must-do items. Explaining this fiasco to the proverbial Martian would be almost impossible. Both Democrats and Republicans say they want to see the reduction in the payroll tax extended for a full year. But they have been unable to reach agreement on how to pay for that cost or on extraneous issues being used as political leverage in the fight, such as speeding up approval of the Keystone XL pipeline. The Senate solution was not so much a solution as a whoppingly bipartisan agreement to fail to reach agreement, kicking the can down the road by a scant two months. No one should feel especially proud of that outcome.
Except, that is, compared with the alternative, which is looking increasingly as though the standoff will continue and the tax reduction will expire, as will the extension of unemployment insurance. Medicare providers, meanwhile, face an unsustainable cut in reimbursements. The House Republicans’ demand that Senate Majority Leader Harry M. Reid (D-Nev.) appoint conferees to work out a one-year agreement is politically and practically impossible. It would consume several legislative days under Senate rules merely to get the conferees in place. In any event, the longer-term agreement that eluded lawmakers before the two-month deal was struck cannot be achieved in time.
The best solution at this point would be for embattled House Speaker John Boehner (R-Ohio) to back away from the cliff to which his rebellious caucus has driven him and to agree to the Senate bill in exchange for a promise from the Senate to return earlier than late January and have conferees work on a year-long extension. It is telling that the speaker, having promised a new, open House, refused to allow the Senate measure to come to the floor for an up-or-down vote, in which enough Republicans might have voted with Democrats to approve the measure.
The unnecessary disruption and economic drag of letting the tax reduction expire is unfortunate. But the real harm involves the failure to extend unemployment benefits. State-paid unemployment insurance would be available for the customary 26 weeks, but extended, federally subsidized coverage that has become routine during economic downturns would end. This is cruel and unwarranted at a time when there are about four jobless workers for every available position and two-fifths of the unemployed have been looking for work for more than six months. If the benefits are not extended, about 1.3 million people will lose coverage in January alone. As the president’s Council of Economic Advisers points out in a report, “In no prior case has Congress allowed special extended benefits to expire when the unemployment rate was as high as it is today.” Can lawmakers really celebrate the holidays while leaving so many Americans in such desperate straits?