House Republicans On The Offensive Following Extended Tax Fight

Congressional Republicans are looking to change the subject, following a long, drawn out battle over cuts in 2012 taxes. They are doing so by pushing for new legislation, that they propose will promote transportation and energy projects, not only creating jobs but also cutting taxes for cash-strapped businesses.

On the other side, Democrats are hoping to continue their winning record by pushing  Republicans to vote on jobs programs that would be financed by increasing taxes on the rich. During an election year, this might just be a winning strategy.

The parties’ differing uses of legislative power serve to emphasize the conclusions that each party took away following the brawl over new payroll taxes, which ended only when Congress finally passed on a $143 billion package to President Obama.¬† The bill also included a payroll tax cut of 2%, and provisions to preserve extended unemployment benefits for those who have been unable to find a job in the long-term. An additional provision will prevent Medicare from decreasing payments to participating doctors.

Until the Republicans dropped their, previously ardent demands for hefty spending cuts, the Democrats had succeeded in presenting the opposing party as opponents of a tax break that would benefit most middle-class Americans. Not a good spot for the Republicans to be in during an important election year.

This puts the GOP in a position where they feel that they need to get the voter’s attention focused on other issues. In this case, they point primarily to what they cite as the failure of President Obama’s jobs and economic stimulus plans.

To this end, House GOP members are working hard to push threw bills that put job growth at the top of the agenda. Examples of this strategy include a $460 billion dollar transportation bill that is linked to additional oil drilling legislation.

But the odds of them passing this legislation, particularly a bill that addresses oil billing, are almost zero. Nonetheless, House Republicans will continue to present themselves as the pro-job party.

Unconditional Offer On Extension Of Payroll Tax Cuts Made

On Monday the leadership of the House GOP said it planned to support a payroll tax cut extension through the end of this year. It would support the payroll tax cut without adding unrelated policies or making offsetting cuts. It is a surprising turn of events. Congress could pass a bipartisan proposal related to 2012 taxes well before deadline and without a huge debate about who pays what when. A compromise related to cuts in 2012 taxes is surprising.

This doesn’t mean that Republicans and Democrats are thrilled with each other when it comes to payroll tax cuts. Speaker of the House John Boehner, majority leader Eric Cantor and Kevin McCarthy, whip, read a statement together. The statement said that because an agreement hadn’t been reached, they decided to put into place a backup plan that extends payroll tax cuts through 2012. This will affect 2012 taxes. With the backup plan in place, negotiations on offsets and unemployment insurance will continue. The statements said that a measure for House consideration could be scheduled.

Despite Republican leadership support, the payroll tax cuts is not set in stone. Republicans might not have the support of conservatives in their party, Blue Dog Democrats could pull their support, and Democrats might not want the payroll tax cuts separated from unemployment insurance. Even though this is still not a done deal and may not affect 2012 taxes, it is remarkable that an unconditional tax holiday was passed by the House GOP. It has been a while since anyone in the government has used the word unconditional and meant it.