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Payroll Tax Meltdown in the House

How are things going in the epic Congressional struggle over whether or not to approve a two-month extension in the ongoing raid on Social Security funds, which could not possibly be implemented in such a short time by employers, even if it was passed?  According to Fox News, it’s been pretty lively today:

House Democrats were fuming Wednesday after Republicans adjourned the chamber just as Democrats were trying to bring up the Senate-passed payroll tax cut bill, a two-month extension that Republicans effectively rejected in a vote the day before.  

House Democratic Whip Steny Hoyer was cut off as he tried to call up the Senate bill for a vote. In an unusual scene, the presiding Republican in the chamber adjourned the chamber until Friday and walked out while Hoyer continued shouting on the floor for the House to vote “to extend the tax cut for 160 million Americans.” 

“You’re walking out,” Hoyer said as officials left the chamber. “You’re walking away. Just as so many Republicans have walked away from middle-class taxpayers.” 

Pa’s got things for you to do, and Mother wants you.  I know she does.  Shane!  Come back, Shane!

This is one of the most shameless examples of Democrats tossing the public interest aside in search of a good sound bite we’ve seen since… well, last Christmas.  As House Speaker John Boehner has been pointing out, the House passed a bill that extended this “payroll tax cut” for a whole year.  That was on December 13.  The President and his Party shot it down because they couldn’t handle the way it paid for the tax cut extension, as detailed by CBS News in a contemporaneous report:

The House Republicans’ bill does so by extending the current federal worker pay freeze one more year, requiring federal workers to contribute more to their pensions, and charging higher insurance rates for Fannie Mae and Freddie Mac mortgages. It would also prevent millionaires from collecting unemployment benefits or food stamps and increase Medicare Part B and D premiums for high income earners.

Democrats have proposed paying for the extension by raising taxes on Americans earning more than $1 million a year.

So it was pure, unadulterated Democrat class-warfare tax hikes versus a funding plan that would have prevented millionaires from collecting unemployment benefits or food stamps.  God forbid we should fund this Social Security-busting giveaway by requiring the government to throw less money around!  Those millionaires can keep their unemployment checks and food stamps, as long as they fork over more tax money.  The serpent of the State must never stop chewing upon its own tail.

The Senate ended up throwing back a two-month extension, which non-partisan independent authorities say cannot be implemented in the short window of time available, as reported by ABC News:

Officials from the policy-neutral National Payroll Reporting Consortium, Inc. have expressed concern to members of Congress that the two-month payroll tax holiday passed by the Senate and supported by President Obama cannot be implemented properly.

Pete Isberg, president of the NPRC today wrote to the key leaders of the relevant committees of the House and Senate, telling them that “insufficient lead time” to implement the complicated change mandated by the legislation means the two-month payroll tax holiday “could create substantial problems, confusion and costs affecting a significant percentage of U.S. employers and employees.”

The NPRC is a non-profit trade association that does not take positions on policy. The group represents organizations that provide payroll processing and services to more than 1.5 million employers, impacting one third of the private sector.

[…] “We’re neutral and we’d be happy to do the work,” Isberg told ABC News.

“The concern is really for those who don’t use a payroll service provider,” he said. Americans will have different outcomes, he said, causing confusion “because they’ll have different outcomes. Some will have it done on time, some won’t, some will have adjustment notices later in the year.”

That sounds lovely, doesn’t it?  Small business owners scrambling to comply with a bureaucratic nightmare, adjustment notices flying around… all so that Congress can slouch to February 2012 and play another game of kick-the-can, while nervous business owners drum their fingers and wonder what the hell they’re supposed to do.

This is all supposed to be a political disaster for Republicans, who Obama can now blame for “raising taxes on the middle class,” not to mention delaying the start of his luxury $4 million taxpayer-funded Hawaiian vacation.  We’re all supposed to forget that the House already passed a bill that does exactly what Obama claims he wants – extend the “tax cut” for a full year – but the Democrat-controlled Senate wouldn’t go along. 

Never mind that all these paperwork-intensive rules somehow couldn’t get worked out until December, or that the entire notion of kneecapping the already insolvent Social Security system to slip middle-class voters an extra $40 a paycheck is ludicrous to begin with.  There has rarely been a more cynical expression of the “screw tomorrow’s children so we can get re-elected today” mindset.  I hope your kids are looking forward to getting even more blatantly ripped off by the Social Security Ponzi scheme, just so Obama could pretend he’s a “pro-growth tax cutter.”

Whatever the short-term resolution of this little drama, in the long term, 2011 will go down as a milestone year for Social Security.  No single individual has done more to shred its illusions than Barack Obama.  First he demolished the “trust fund” fairy tale by openly threatening to cut off Social Security checks if the debt ceiling wasn’t increased, and now he’s stomped the “contributing to your own retirement fund” myth into the dirt.  You most certainly are not contributing to some kind of retirement fund, if your contributions can be reduced without any immediate, corresponding reduction in your future benefits.  No one is talking about reducing the Social Security payout for Americans who paid into the system during Obama’s “cut.”

How can we even be discussing a “payroll tax cut,” if the cut in question is not being applied to a “tax?”  And yet, for decades, Social Security mythology has rested on the notion that your paycheck deduction was a “contribution.”  Like hell it is.  It’s a tax, Social Security is a welfare program, and it’s as broke as the rest of this beggar government.  Thank you for making all of that clear, Mr. President.

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Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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