COMMENTARY | The House has passed a bill that would extend the payroll tax cuts for another year, causing outrage among Senate Democrats and in the White House. The Democrats are mad about two aspects of the bill, according to Bloomberg.
The first thing the Democrats are mad about is that the House would offset the payroll tax cut by enacting spending cuts. The Democrats would prefer to slap a surtax on all incomes over $1 million. The Republicans respond such a surtax would dampen economic growth and job creation.
The other thing about the payroll tax cut bill that upsets the Democrats is it calls for the approval of the Keystone XL pipeline that would take oil from the tar sand fields of Alberta to refineries in Texas. President Barack Obama has deferred approval of the pipeline until after the election to appease his environmental supporters.
Republicans point out the pipeline would create jobs and would open up a source of oil from a friendly country that would offset oil now being bought from unfriendly Middle Eastern countries.
Senate Majority Leader Harry Reid, D-Nev., is vowing to block the House version of the bill and President Obama has promised a veto. And so, once again, the government is at an impasse over a bill that almost everyone says they support.
It should be noted the Senate, run by Democrats, has yet to pass any version of a bill that extends the payroll tax cuts. As much as Democrats like to posture about making the "rich" "pay their fair share" they have been unable to pass legislation that includes a millionaire's surtax.
The politics of this outbreak of gridlock are interesting to observe. President Obama and his allies will blame the Republicans for any increase of payroll taxes that occur next year. Republicans will point out the House, which they run, has passed a bill extending the payroll tax cut. It is the Democrats, they will point out, who are holding things up.
Somewhat diluting the class warfare stance of the Democrats is a plan by Reid to insert some extensions to business tax breaks, due to expire at the end of the year, to mollify House Republicans. But a bill that does not include the Keystone XL provision might not be acceptable.
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