But public contempt for Congress is so rampant that the effort may fade away in a pox-on-all-their-houses fog. If that happens, President Barack Obama and congressional Democrats could lose a political edge as they head into the 2012 elections with a struggling economy.
Democratic strategists say Republicans are blundering by refusing to extend a payroll taxcut, even after the Senate overwhelmingly approved a temporary compromise Saturday. GOP lawmakers previously fought hard to extend Bush-era income tax cuts for everyone, including the wealthiest.
“This is a rare moment when the public is with the Democrats on a tax issue, and against the Republicans,” said Sen. Charles Schumer (D-N.Y.)
Some conservative bloggers have urged Republican lawmakers to embrace the payroll tax cut extension, saying the GOP is identified with tax cuts.
Nonetheless, many congressional Republicans have either opposed the extension outright or demanded concessions strongly opposed by Democrats. Some think they won’t pay a price.
Even if the impasse leads to a tax increase on wage earners in two weeks, Democrats will have a hard time convincing voters that they’re the good guys and Republicans are the bad guys, said GOP strategist Rich Galen. Americans are so sick of congressional squabbling, he said, “they have tuned that kind of stuff out. I don’t think anybody believes any of them anymore.”
For the past few years, Republicans have fought hard to extend the Bush-era income taxcuts for everyone. Obama unsuccessfully tried to end those tax cuts for high-income people on schedule.
Republicans have taken a different tone on the payroll tax cut, which steers more proportional benefits to low- and middle-income workers.
At Obama’s urging, Congress agreed last year to reduce the tax that nearly all wage earners pay toward Social Security. Long set at 6.2 percent, the levy was temporarily lowered to 4.2 percent for 2011. (A separate 6.2 percent paid by employers was unchanged).
Citing the bad economy, Obama said he wants to extend the payroll tax reduction for another year: all of 2012. Many GOP leaders balked, demanding concessions in return. Among other things, Republicans said a payroll tax cut must be offset by federal spending reductions elsewhere. They did not apply that condition when extending the Bush-era income tax cuts.
With the payroll tax scheduled to return to 6.2 percent on Jan. 1, the GOP-controlled House and Democratic-controlled Senate have been unable to reach an accord. The Senate approved a two-month extension of the lower rate last weekend and adjourned for the year, planning to revisit the matter in February.