Tweet
The payroll tax cut and extended unemployment benefits expire on February 29. And though the House-Senate conference committee charged with figuring out a year-long extension met yesterday, there really isn’t a lot of movement toward a solution. Pay-fors seem to be the biggest stumbling block.
On Wednesday, the House approved one of the GOP’s favored offsets, an extension of a pay freeze on federal employees.
Democrats have not embraced that proposal, and conferees from the party said Wednesday that they were still hopeful that a surtax on millionaires could be used to fund an extension of payroll tax relief.
“We’re not going to renegotiate what was done in the debt-ceiling increase,” said Sen. Ben Cardin of Maryland, a Democratic conferee, about the federal pay freeze. “That’s off the table.”
There’s another meeting scheduled for today. I have an idea for the conference committee: don’t pay for the changes. Just don’t. It’s a minimal amount of money – maybe $150 billion – in the grand scheme of things. And paying for it would only reduce the impact. If you really want to pay for it, use the budgetary gimmick of the savings from overseas contingency operations – the drawdown of war funding from Iraq and Afghanistan. Those are scorable savings, and capping those funds makes it harder for the Pentagon to use them as a slush fund to finance some of their preferred programs for which Congress refused to provide funding. Democrats are actually talking about not offsetting the unemployment extension, on the grounds that those are emergency benefits. But it’s early yet.
Co-chairs of the conference committee Dave Camp and Max Baucus floated the idea of a short-term extension while the details get hammered out. So we might get this year-long extension in increments.
The other issue that needs to be worked out is the proposed cut in unemployment benefits, which seems at least partially inevitable. Republicans want to not only cut the benefit from 99 to 59 weeks, but want to force unemployed workers without a high school diploma to seek a GED as a condition of receiving benefits, and to allow states to drug-test applicants. The two-month extension did not extend the “look-back” for states to keep receiving the final 20-week tier of extended benefits, which effectively curtails them from 99 to 79 weeks. Democrats are talking about “second-tier” changes to unemployment insurance, though they did not define what that means.
The extension is likely to happen, but we’re probably going to go through a lot of heartburn before it’s done. And the offsets are really unclear at this point.
6 Comments
Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About FDL News Desk
Are you kidding me? The millionaire surtax will cover two months of the payroll cut. That’s it. That’s all.
What do you plan to do about the rest of the year?
Gad.
I want the heartburn remedy for capitol hill.
On second thought, not so much. Finger in voters’ eyes concession would be much more profitable.
If Oilbomber mishandles this, he’s throwing the game to Romney. If he throws the game to Romney, JEB is fucked. UNless – JEB is VP.
Cutie Pie Rubio will have to wait.
A little ot but I noticed on the CBO’s web site that social insurance taxes amounted to 819 billion or 5.4% of GDP while indivdual taxes were 1.1 trillion or 7.3% of gdp. But I suppose there are millions of working people who don’t pay any taxes at all, eh? BTW the social insurance taxes amounted to 12.4% of compensation. It goes up to 14% in 2013 fiscal year. Shit Mittens doesn’t pay that. Corp taxes were 189 b. 188b?
As it was last time, so it is this time: the jumbo-coin option is the only one that makes sense. Why? Because the president can execute it unilaterally. It does not require “bipartisan cooperation.” All of the necessary law is already in place.
The surtax would raise $267.5 billion over 10 years
12 months of OASDI/HI payroll tax is 829 B at 15.3% payroll tax on ee and er.
10/12ths of 829 times 2.0/15.3 equals 90 B.
Now using taxes over 10 years to offset a one year expense is a bit of a game, but it is the game G W Bush used to justify the tax cuts for the rich as being not that bad to revenue.
So you are correct – the surtax before consideration of it post 2012 covers a little under 3 months of the payroll tax cut – but so what – that is how the game is played when they want to give to the rich – so why should it not be the way the game is played when they want to take from the rich and give to the middle-class?