The House GOP’s Payroll Tax Punt

Congress had scheduled one big fight this month: A negotiation over the payroll tax cut, over whether or how to extend it through 2012. The Great Payroll Fight of 2011 had ended with a conference committee, which would use the time granted by a two-month extension to come up with something great.

Today, while we were all distracted by the budge (or, more realistically, by videos of cats doing things), the House GOP… announced a possible punt.

Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue regarding offsets, unemployment insurance, and the “doc fix.”

Victory for Democrats? No, don’t be ridiculous. Barack Obama is on the ballot in 10 months, and the Democratic goal is to keep as much stimulus churning into the economy as possible. The payroll tax cut is part of that. But so is the unemployment benefit extension. In the deep of the 2011 negotiations, Republicans wanted to extend those benefits while reforming them, requiring more tests for eligibility and shrinking the amount of time that workers could take advantage of them. Democrats can’t quite afford to let that expire. If they end up losing in this months negotiations, Republicans have decided to keep the mantle of tax-cutting while handing off the much-less-popular-unless-you’re-an-economist unemployment insurance debate.