For the last several weeks, President Obama has been eager to demonstrate the fact he has some credible ideas that could help the economy. The problem, of course, is that the president doesn’t want to push ideas he knows will fail in Congress, so he’s left to pursue more modest measures that might have a shot.
At the top of the list is an extension of the payroll tax cut. From Obama’s perspective, this should be a no-brainer — not only do Republicans love tax cuts like these, but failing to pass an extension would mean a tax increase at a very inopportune time. Even GOP leaders, for their madness, should be able to work with the White House on this.
But they’re not. House Budget Committee Chairman Paul Ryan (R-Wis.) declared on Fox News over the weekend that he’s opposed to a payroll tax cut extension because “it would simply exacerbate our debt problems.”
Republicans have declared countless times that allowing taxes to go up when the economy is weak would be a disaster, and yet, here we are.
Jon Chait noted that Paul Ryan, during the 2001 recession, argued the exact opposite
To recap: In 2001, we faced a mild downturn, one which monetary policy was more than adequate to address. Ryan was nonetheless enough of an ultra-Keynesian to insist on immediate stimulative tax cuts to boost demand. Now, we face a massive economic crisis and the Federal reserve is almost out of ammunition. Now Ryan has been converted to an odd, economic doctrine that insists on imposing contractionary fiscal policy. I’m sure that in Ryan’s mind, there’s some deeper principle at work than “stimulate the economy under Republican presidents and de-stimulate it under Democratic presidents.” But that is functionally the Republican position.
As Sen. Chuck Schumer (D-N.Y.) recently argued, “If they oppose even something so suited to their tastes ideologically, it shows that they’re just opposing anything that helps create jobs. It almost makes you wonder if they aren’t trying to slow down the economic recovery for political gain.”
This is the whole point of the “sabotage” question. The argument isn’t that Republicans have conservative ideas about helping the economy. Questioning their motivations on this alone would be foolish. The point, rather, is that Republicans have begun rejecting their own ideas about helping the economy.
In the larger context, it’s possible House Republican leaders, in their heart of hearts, actually support an extension of the payroll tax cut, but just aren’t willing to say so. Why not? Because then they lose leverage — GOP officials know the White House wants this, and if they simply agree to pass the measure, they won’t get anything extra out of the deal.
It’s likely, then, that congressional Republicans will simply hold the payroll tax cut hostage, and demand other goodies from Democrats in exchange for doing what the GOP wants to do anyway. If Dems give in, Republicans get more of what they want. If Dems don’t, Republicans will blame Dems for raising middle-class taxes, even if it’s obviously the GOP’s fault.
And what kind of ransom would Republicans expect for this? Apparently, they want a tax break for repatriating overseas corporate funds, which didn’t work when it was tried seven years ago, which is fundamentally regressive, and which would worsen the deficit the GOP pretends to care about.
The 2010 midterms continue to look like the biggest mistake Americans have made in a long while.