2:11 PM EST, February 6, 2012
The latest news in Washington on the payroll tax cut is that there's not much news. To the surprise of no one, negotiators in Congress are exactly where they were last December when the tax break was extended two months — gridlocked.
So once again, the clock is ticking. Congress has three weeks to decide whether to extend the tax holiday for some period of time (preferably the remainder of the year but at least enough time for businesses to adjust their withholding calculations).
But, of course, the situation is really much worse. Unemployment compensation and Medicare reimbursements are also tied to the measure just as they were last year. And who knows what unrelated provisions lawmakers now may try to tie to the bill? (Drug tests for the unemployed or some other pet idea is always a possibility.)
The cost of approving an extension is substantial — perhaps $100 billion or more. But the cost of doing nothing would appear to be even greater. Just as the economy is perking up and unemployment is going down, working people would see their paychecks lightened by $1,000 or more for the remainder of the year.
For Republicans, this is clearly a difficult political calculation. Do they really want to cause an increase in taxes no matter the circumstances or do they really want to approve President Barack Obama's extension and, by doing so, help him get re-elected this fall?
That's no exaggeration. As unemployment numbers continue to fall, and the stock market climbs, consumer confidence is rising, and it's obviously helping Mr. Obama's job performance rating. Recent polls show the president would defeat Mitt Romney in a theoretical match-up, the first time the incumbent has taken the lead.
It's not hard to see why. Asked in a Washington Post-ABC poll who better understands the economic problems this country is having, respondents picked Mr. Obama over Mr. Romney by a whopping 15 percentage points.
If the issue is going to be the economy, Mr. Obama may have the dual advantage of riding an economic upswing and a better appreciation for the downtrodden than a GOP nominee who dismisses the concerns of the very poor. But that's only if the economy continues to improve at the current modest rate, or better.
Republican leadership has certainly talked the talk. They claim to want to pass an extension, but it's not a unified front. Some in their ranks see little effect from it aside from helping the White House polish the incumbent's tax-cutting credentials. Others dismiss the extension because it's not permanent (as if the current Congress could ever do something more ambitious regarding taxes and spending than what's currently on the table).
Yet even a failure to pass an extension might boost Mr. Obama as it supports his portrayal of an inept and unyielding Congress. On that point, the American public is a good listener, as their opinion of Congress has rarely, if ever, been lower. A survey released last week pegs the approval rating at 7 percent. Prison inmates are more highly regarded.
Mr. Romney and others can scoff that the economic recovery would be greater if not for Mr. Obama's policies, but that's a dubious claim at best. By the estimates of Capital Hill's own budget experts, stimulus spending created enough jobs to lower the unemployment rate by more than a point. The jobless rate is now at a three-year low.
With the U.S. economy picking up steam, it's no time for Republicans put their political ambitions ahead of the national interest. That may prove a test of House Speaker John Boehner's grip on his often fractious majority, but even tea party politicians must see that hurting the recovery helps no one, including the Republican Party's eventual nominee.
Indeed, demonstrating a willingness to compromise would appear to provide exactly what Republicans need right now, particularly after the blistering rhetoric of the primary season that's had candidates competing to be as far-right wing as possible. To hear Newt Gingrich sneer at "moderates" to great applause might lead independents and Democrats to lose hope entirely.
But it's hard to bet on a solution emerging any time soon. If the do-nothing Congress has demonstrated anything, it's a desire to make political points at the public's expense.
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