President Obama, in an attempt to sell the deal he cut on extending the Bush tax cuts, keeps holding up the one-year payroll tax holiday as his big win. Defenders of the deal, such as Ezra Klein, act like without this deal, there would be no way Obama could have gotten this payroll tax holiday. I think this is an inherent misunderstanding of the Republican position. Since well before this deal, I thought a payroll tax holiday was going to be one of the few big bipartisan things Obama and John Boehner would agree to. I have zero reason to believe Obama couldn’t have gotten the payroll holiday later as a stand-alone bill, completely separate major concessions to the GOP.
The payroll tax holiday was never a progressive idea. It is rather weak stimulus and could work to undermine the program. The idea was advocated by the conservative American Enterprise Institute and Michael Boskin, a senior fellow at the Hoover Institution. The Republican Governor of Indiana, Mitch Daniels was, only two months ago, promoting a temporary, one-year “payroll tax holiday” in a Wall Street Journal op-ed. Even Mitch McConnell came out in support of a temporary payroll tax cut as an alternative to the stimulus bill in 2009.
Am I honestly to believe that in, say, February of 2011, if President Obama was to take the stage with Mitch Daniels and a bunch of conservative scholars to announce his support of a payroll tax cut, the Congressional Republicans would say no? I just don’t see Republicans being put on the spot and deciding to oppose a tax cut for working families.
Policy aside, good negotiations don’t result in one side claiming they won a “concession” from the other side if it was something the other side already wanted. That is a sign of a terrible negotiator. It is silly to consider it a “success” for Obama because there is every reason to suspect in the near future Obama couldn’t have gotten Republicans to support a stand-alone payroll holiday bill without any deal.
To add insult to injury, even if you think the payroll holiday is a good idea for the middle class, Obama “won” only a one-year tax cut for working families in exchange for a two-year cut for the ultra-wealthy. Clearly, two is a bigger number than one.