Scripps Howard News Service
In the curious way Washington works, congressional Republicans never felt that the Bush tax cuts, the origin of our current tide of red ink, needed to be offset by raising taxes or cutting spending elsewhere in the budget.
Neither did the Republicans or the Bush administration believe that the wars in Iraq and Afghanistan needed to be paid for by tax increases. We paid for those wars the same way we paid for the tax cuts — by borrowing the money, mostly from ourselves.
Now that President Barack Obama is refashioning himself as a tax cutter, to some extent, the Republicans are in a bind. As a party, they are institutionally in favor of tax cuts, but as the newly refashioned party of anti-spending, they now feel obliged to pay for them.
The centerpiece of Obama’s latest jobs program is another cut in the payroll tax on employees. This year it was cut from 6.2 percent to 3.1 percent, and Obama proposes dropping that even further, to 2 percent.
The Democrats planned to offset some of the costs by a 3.25 percent income surcharge on millionaires. The payroll-tax cut and the surcharge came to a vote in the Senate last week, and while it got a 51-to-49 majority, it fell short of the necessary 60-vote supermajority. That’s an indication that Obama, after some further horse-trading, will get his payroll-tax cut.
A Republican plan to pay for the tax cut by freezing federal pay and cutting the federal work force by 10 percent through attrition got hammered, losing 20 to 78, with 26 Republicans defecting.
The Senate debate was likely a preview of the 2012 campaign, when Democrats will strive mightily to paint the Republicans as defenders of the rich and privileged. The payroll-tax cut is set to expire at the end of the month. If it does, Obama said last week, it means the “Senate Republicans chose to raise taxes on nearly 160 million hardworking Americans because they refused to ask a few hundred thousand millionaires and billionaires to pay their fair share.”
That charge may be getting a sympathetic reception. A new New York Times-CBS poll shows that nearly 7 out of 10 believe Republicans favor the rich. Obama, it seems, somehow outflanked the Republicans on both the left and the right on the tax issue.