MILLER: Republicans cave on payroll tax deal

House Republican leaders are doing everything they can to avoid political conflict with President Obama. The price tag for accommodation just went up $101 billion after Friday’s vote to extend the 2 percent payroll tax cut. Republicans said they had no choice, blaming the bad deal on political pressure, but they had already rolled over once before. Extending this policy another year does nothing to stimulate the economy.

The 6.2 percent payroll tax is, in theory, used to fund the Social Security and Medicare trust funds. Technically speaking, the Treasury Department will pay for the 10-month extension of the lower rate by replenishing the money lost to the Social Security trust fund. In reality, the cash is just going to be borrowed from overseas, with no plans to pay off the new debt or shore up the retirement Ponzi scheme.

The deal is being sold as the best that can be expected under a divided government. “House Republicans did the right thing by passing a paid-for extension of the payroll tax holiday in December,” said House Speaker John A. Boehner’s spokesman, Michael Steel, referring to the House-passed, year-long bill that was blocked by the Democratic Senate. “But, in the end, we decided we couldn’t let taxes rise on 160 million Americans due to the obstructionism and irresponsibility of the Democrats who run Washington.”

For tax relief to stimulate the economy, it must be dependable. That means it must be long-term and it must encourage investment. The payroll tax cut is a public-relations stunt with a near-term expiration date. Consumers have left the extra cash in the bank because they’re afraid of what lies ahead in this shaky economy.

Mr. Obama and the Democratic Congress tried to use this gimmick in 2010 to show the American people they were doing something about the recession. It ended up sucking $100 billion out of the retirement program without spurring growth. When it was set to expire, Mr. Obama demagogued what he called the “middle-class tax cut.” House GOP leaders couldn’t take the heat leading up to Christmas, so they cut a quick two-month deal that was paid for in order to evade blame.

In this election year, Mr. Obama is pulling on the heartstrings while claiming the extra $40 handed out per paycheck will make a difference. “Allowing this tax cut to expire would make people’s lives harder right now,” he said. The president is blatantly buying votes with taxpayers’ money.

The Tea Party gave Republicans control of the House of Representatives in order to stop Mr. Obama’s profligate spending. The 91 backbenchers in the House who voted against extending the tax cut were overwhelmed by a backroom deal made by a leadership that appears more afraid of losing minor political battles than sticking to principles. If a GOP-controlled House can’t stop making the debt-crisis worse, voters aren’t likely to see how sending more Republicans to Washington will make much of a difference.

Emily Miller is a senior editor for the Opinion pages at The Washington Times.

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