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  • Enough Political Theater - Time for Congress to Get the Job Done

    As the clock counts down toward Christmas, Congress still has major unfinished business to attend to.  Not that we should be surprised.  Emblematic of a resoundingly disappointing year, the last remaining issue to be resolved directly affects the pocketbooks of Americans.  Just days from now, the payroll tax “holiday” will expire.  At the same time, fees for physicians and hospitals providing Medicare services will be severely cut and additional weeks of unemployment benefits for long-term unemployed will run out.  It’s not like these expirations were unexpected. These issues have been kicking around on the Congressional “to do” list since last December.

    So now the debate has taken on a new degree of political theater.  To its credit, the House passed a bill which, while not perfect, would at least prevent the looming tax hike for all working Americans, extend additional unemployment benefits and prevent cuts to Medicare providers with another “Doc Fix” for a full year.  Besides these three key policies, the House also included some policies helpful to job creation as well as an important change to fix Medicare’s finances, thus strengthening it for seniors today and tomorrow.  This change is crucial toward tackling the nation’s largest and most pressing fiscal issue – our entitlement crisis.

    Somehow this was too much to do for the Senate.  Unable to get the job done right, they passed a measly two-month extension of these three policies and quickly got out of Dodge, a.k.a. the Nation’s capital.  Somehow, this is supposed to reassure us that Senate Majority Leader Harry Reid (D-NV) and the rest of his Senate colleagues are able to do the people’s business.

    This two-month extension is terrible policy.  For example, working Americans have no assurance that they will not have a tax hike when the two-month extension expires.  Plus, this will actually add costs and complexity for the nation’s employers by requiring additional changes to their payroll systems to accommodate a potential series of changes based on when the Senate and the House do finally come to agreement.  The short-term punt will be especially burdensome to smaller businesses who generally have “off the shelf” payroll applications or who still do payroll by hand.

    And, to make things even more complicated, the Senate short-cut version adds even more layers of complexity for what should be a simple extension. The Senate bill limits the amount of income that qualifies for payroll tax relief so that upper-income earners don’t get more than their “fair share” of the tax relief during this brief two-month period.  Even a “simple” kick-the-can-down-the-road piece of legislation was infused with a class warfare mentality.

    Another example of the Senate’s twisted logic is that the Senate bill would be paid for by increasing fees on Fannie Mae and Freddie Mac, the government-sponsored housing behemoths now in federal conservatorship after going belly up during the 2008 financial crisis. The fees are not necessarily bad policy as they could provide better capitalization, reduce taxpayer risk and exposure, and make private lenders more competitive. However, in true Washington fashion, these fees would not be used to shore up Fan and Fred’s atrocious financing, but instead would be used to pay for more spending and to offset the costs of avoiding a tax hike.

    So enter, stage right, the political theater. Rather than remain in Washington and work through the differences through the regular order, Harry Reid sent Senators home for the holidays.  Congress should finish its work now by settling these three remaining policies for the duration of next year. The Senate should come back and give the nation a real gift – showing that it is up to the task of completing at least the simplest tasks before slinking out of town.

    Posted in Economics [slideshow_deploy]

    21 Responses to Enough Political Theater - Time for Congress to Get the Job Done

    1. JeffC says:

      "The Senate bill limits the amount of income that qualifies for payroll tax relief so that upper-income earners don’t get more than their “fair share” of the tax relief during this brief two-month period. "

      the fact is that the "rich" would only benefit if the Dems never intended to extend the holiday past 2 months …

    2. Bobbie says:

      the president can ALWAYS avoid a tax hike! ALWAYS! All it takes is (self) discipline and respect for the people and his position. democrats won't do what's necessary so they add an ultimatum! If reps don't do it the derelict democrat half way, we'll punish Americans! Taxes to all!? what's that? It's plain to see the senate is far from acting in the best interest of America and won't even explain why democrat senators see it better to have a two months time than a whole year for tax cuts? Democrat senators don't explain how they come up with their allegations against republicans so the senate democrats run on fear tactics with no merit! The removal of the democratic party would be of great benefit to this country and people.

      A year is in the best interest of America(ns) as it brings 10months more time of certainty! there's always an angle with democrats that consumes time and money and adds to the destruction of America(ns) leaving America(ns) in a clouded future! Get these over paid senate cowardly spoiled brats back to do their job and that being what's right for America not their tax paid personal interests that are in total contrast of the tax payers!

    3. steve h says:

      Why doesn't Speaker Boehner just let the House vote on the bipartisan bill that Republican and Democrat Senators negotiated and passed with 89% majority? I don't understand why House Republican leadership won't let their members vote on the bill – and instead bring up these message votes. Finally, both parties came together to work out a deal to make sure taxes don't go up an millions of Americans on Janurary 1st and the House Republicans are now blocking it? It's amazing to see the sniping between Senate and House Republicans – I just hope all Americans remember what they are doing in November!

      • Ronald Twyman says:

        Because Speaker Boehner is looking out for all Americans, If we don't remember in November, we will lose life as we know it! Rather then hopping, I pray that you open your Eyes and stand behind the Speaker, help us to take back this grate country, for the good of all Americans! Merry Christmas and God Bless!

      • Bobbie says:

        because two months isn't long enough! it's a piece of kleenex on a deep and bleeding wound! President threatens taxes on the people again, if he doesn't get his unethical way. To say he'll raise taxes on the first of January if the senate democrat conjured deal of two months isn't signed, indicates the democrat two month bill will be raise taxes on the first of March. It can extend to forever if democrats were on the same side as America. This unprofessional exploitation of their conflict of interest by favoring themselves over the people is just as embarrassing as the democrats in Wisconsin who run and hide and cry "there's no democracy?!" What embarrassments to America! When have democrats done a thorough job let alone one that benefited America?

      • Redfray says:

        Sorry steve, you missed the add ons to the 2 month bill. I can't understand why they are playing around while American hits bottom.

    4. Joe R. says:

      What is the Payroll Tax? IS this not the FICA tax that is collected to pay for Social Security? IF they cut the tax rate on this are not the politicians cutting the funding to Social Security?

    5. Elad Recneps says:

      Just blame the Repubs. I'm sure the leftist liberal progressive communists who want to take over the world will.

    6. william S, Seay says:

      I think it's time to limit the House and Senate to two terms only like the president put a flat tax in the works and cut out all other taxes and let everyone pay the same tax.

      • Redfray says:

        One term is enough with recall by the states, if they don't follow the constituent's request. With only one term, there is no need of using tax monies for reelections.
        Stop all organizational donations and force all donator's to hand deliver contribution with a signed form of how much they are giving. This will stop these organizations from pushing there agenda on America.
        Stop all double taxation by all government agencies, including permit fees.

    7. James says:

      The problem I see with this "Tax Holiday" is, that this is a reduction in the monies collected for Social Security. We all know that Social Security is already in trouble, so why are we reducing the money we collect for it. This will only cause S S to bankrupt even sooner. This sounds like insanity to me!!!

    8. DFTampa says:

      Keep the percentage lower, just increase the total allowable income that can be taxed. This avoids all the dumb surcharges, class warfare, and having to raid the social security fund.

    9. Tony Montana says:

      Look at the up Side, We will not have to Borrow that much money to pay SS next Month.

    10. steve h says:

      The Tea Party House should just be allowed to vote on the Senate bill. It's a farce that Boehner and Cantor won't even bring the bill up for a vote – they know it will pass. What a joke the House Repubs have become – no wonder they have the lowest approval ratings of all. Even Wall Street Journal is bashing them for this. Talk about dropping the ball. Speaker Boehner – let your Members vote!

    11. Anthony Mooney says:

      This looks and sounds like a joke…is the senate insane? In this day and age of media correctness does the senate not know we are looking and see what's going on, We unlike them are not stupid.. This is affecting them and everyone around them. We all look like idiots. Shame on them…Maybe they can be saved from themselves, we need to unite against this insanity.

    12. John Hopkins says:

      The stupidity is appalling, but then these people just reflect the intelligence level of their constitutencies.
      It's called a direct relationship…as long as we keep electing idiots, we'll keep getting policy like this.
      Deep in the bowels of the politically-added brainsof the Senate must be a reason for the two month limit, and journalists should be asking this question.

    13. Tobyw says:

      Cutting the total employment cost including benefits and regulations is what is needed at this time to increase employment and increase tax revenue and to reduce deficit spending. The cost of doing business should be reduced during a recession and recovery if employment is to increase.

      Cutting the employee side of the payroll tax is the equivalent of giving a raise. I don't think a 4% raise is going to motivate anyone to get a job. Additionally, the cost of this raise covers the entire workforce of most income brackets. It is a Keynesian stimulus, like those which have cost hundreds of billions and produced little if any job growth. Previous stimuli gave pay increases or employee tax rebates. This did little during Obama or late GW Bush to aid employment or the economy and raised debt very significantly.

      During recessions wages and prices are supposed to fall, the effect of lowered prices being increased demand. One of Hoover’s errors was to support higher wages and prices at the start of the Great Depression. Obama is experiencing the same. Increasing the costs of benefits and regulations has raised the cost of employment significantly as well.

      In order to increase employment you need to increase the profitability of employees, which would in this case require cutting the employer side of the payroll tax thus reducing the cost of employment. The hiring of each previously unemployed employee would raise government payroll tax revenue by an amount equal to the current tax less the cost of the rebate, and the cost side of the equation would be limited to unemployed people getting jobs.

      This would be enough revenue and savings to pay for the tax cut and more.

      To increase hiring even more, the minimum wage should be cut or eliminated. The Bush era minimum wage increases made it roughly as expensive to hire two workers as it had been to hire three workers!

      Savings in welfare payments made unnecessary by employment are a plus as well against government deficits.

      The employee-side payroll tax cut is just a populist boondoggle and is a very expensive mistake that will hurt Social Security badly and do nothing for employment growth.

    14. oi812 says:

      Once again The Dems can point to a do nothing Congress. This is all Obama can run on. The problem has been and will continue to be the Senate. This will go on all of next year unless the media starts pointing it out. I wish one reporter would ask Reed why he has not passed a budget and when is he planning on doing one. The Dems will not pass a budget because it will expose of bad this budget is and they have no ideas on how to balance it without killing their hand outs to get votes

    15. Jer Broadhurst says:

      The payroll tax referred to in this bill is FICA tax, which has been the sole income for Social Security payments. As we all know, there is no Social Security Trust Fund, because both parties have already spent the money. Therefore, current FICA taxes collect cover current Social Security payments to seniors. I believe that the current expenses exceeded current income in 2010, which means that Congress must make up the difference from other sources. So if no FICA taxes were collected in 2011, where did the money for Social Security payments come from. It does not make sense to stop collecting FICA taxes, until there is a true fix to the Social Security unfunded liability. A two month extension puts an undue burden on business, because they have to do the necessary payroll programming to stop collecting FICA for two months (and perhaps turn it back on for March payrolls.

      Also, to make up for uncollected FICA taxes, there would be increased fees for Fannie Mae and Freddie Mac that would be passed on to mortgage holders. I understand that those fees would only apply to loans of $200,000 or more. Another example of Marxism to make the "rich" pay their fair share. Will this be a permanent change so that a hidden tax will be collected even when FICA taxes are eventually collected. The result is a new tax – not a tax decrease.

      Has every Congressman read every sentence of this bill? Do they really know what they are voting on? What else is hidden in this bill that we don't know about?

      Why can't Republicans better explain what is actually in the bill and the true reasons that it should not be passed?

    16. Jer_Broadhurst says:

      The payroll tax referred to in this bill is FICA tax, which has been the sole income for Social Security payments. As we all know, there is no Social Security Trust Fund, because both parties have already spent the money. Therefore, current FICA taxes collect cover current Social Security payments to seniors. I believe that the current expenses exceeded current income in 2010, which means that Congress must make up the difference from other sources. So if no FICA taxes were collected in 2011, where did the money for Social Security payments come from. It does not make sense to stop collecting FICA taxes, until there is a true fix to the Social Security unfunded liability. A two month extension puts an undue burden on business, because they have to do the necessary payroll programming to stop collecting FICA for two months (and perhaps turn it back on for March payrolls.

      Also, to make up for uncollected FICA taxes, there would be increased fees for Fannie Mae and Freddie Mac that would be passed on to mortgage holders. I understand that those fees would only apply to loans of $200,000 or more. Another example of Marxism to make the "rich" pay their fair share. Will this be a permanent change so that a hidden tax will be collected even when FICA taxes are eventually collected. The result is a new tax – not a tax decrease.

      Has every Congressman read every sentence of this bill? Do they really know what they are voting on? What else is hidden in this bill that we don't know about?

      Why can't Republicans better explain what is actually in the bill and the true reasons that it should not be passed?

    17. Unfortunately during the long period of prosperity we experienced from the 1980s through 2005 the American public paid little or no attention to the element that was entering politics.

      Politics is now the home of the least competent, least ethical and below average intelligent segment of our population.

      These are men and woman that could not hold a job in the least skilled areas of our economy, now they are deciding our future.

      Boehner, Reid and Obama cost us tens of million of dollars a year in current and deferred compensation, forget the cost of the perks like flying Obama's dog from Hawaii to DC for a pet store photo op.

      NONE of them are worth it.

      We are in very, very deep trouble.

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