House Republicans caved to President Barack Obama’s demand for a two-month payroll tax cut extension, ending an impasse that threatened to raise taxes on millions of Americans on Jan. 1.
The capitulation came fast Thursday afternoon as House Republicans found themselves increasingly isolated in insisting that a full one-year extension was the only solution to the year-end crisis. The end of this debate will also come quickly – the House and Senate hope to clear the $33 billion legislation on a voice vote Friday morning.
In announcing the deal Thursday evening, Speaker John Boehner said Republicans had won new provisions that would protect businesses from certain payroll reporting requirements. Republicans also got Democrats to agree to accelerate the meeting of a joint House-Senate conference committee to negotiate a full-year deal.
“It may not have been politically the smartest thing in the world, but let me tell you what: I think our members waged a good fight. We were able to come to an agreement. We were able to fix what came out of the Senate,” Boehner told reporters.
The speaker said he didn’t know whether any lawmaker would object but was prepared to call the House back into session next week to pass the bill. Boehner broke the news to his rank and file on a late afternoon conference call that lasted about eight minutes, in which no open mic session was held so no questions could be asked, sources said.
The pre-holiday breakthrough marks a major moment in Obama’s relationship with the Republican House – Obama had come under fire from Democrats for conceding too much too soon throughout the year, but on this deal he’s getting exactly what he wants.
“This is good news, just in time for the holidays,” Obama said in a statement, noting that the tax cut would work out to about $1,000 for the average household. “This is the right thing to do to strengthen our families, grow our economy, and create new jobs. This is real money that will make a real difference in people’s lives.”
Join the official YWN WhatsApp status
8 Responses
Spineless.
The headline should read:
House Republicans Cave in to Senate Republicans on Senate’s Payroll Tax Proposal
Obama had offered to sign anything, and it passed the Senate by a veto-proof margin.
Do you people even understand that this was a joke?
If you are a W-2 employee, your employer deducts 7.65% off your gross for FICA or Social Security & your employer also matches that with an additional 7.65%. That money along with Federal Withholding is paid to the federal treasury by way of a bank.
This “cut” is a reduction in the 15.3% (FICA) paid into that almighty social security lockbox by NOT the federal tax. So if this is the FICA tax, why does it still have to be paid for? Let the money just not be available to us when we would collect on it.
The answer is, this proves the democrat party to be a bunch of liars because they always claimed there was a lock box & money paid in wasn’t being used for anything else.
For a person making 35k annually, this means they could keep about $13 a week extra of their money. You can do the math and see that someone making 100K a year would keep an extra $38 and so on.
So now the question is how its paid for. Really it shouldn’t be a question. If we were sane, we would say, “You didn’t get the money so you can’t spend it,” but not the US Government! They need the money for all the crazy programs such as, keeping unemployed people from becoming employed. So where is the money coming from? YOU AND I when we go buy a house or refinance our current properties because now there will be an additional tax (they call it a “fee”) of about 20 DOLLARS A MONTH to cover this manure. WE ARE SUCKERS AGAIN!!
The bottom line is this wasn’t presented honestly by the socialist liberal democrat workers party & alas, the republicans don’t have the guts to fight back and call it what it is. Had they fought the TRUE fight, people who care would understand. The drones who don’t care & are only interested in themselves are lost causes.
#3- There is no “social security lockbox”. There is no trust fund. This was clear in the debt limit dispute when Obama explained he couldn’t pay social security benefits without an increase in the debt limit since he doesn’t have enough money coming in, and he can’t “raid” the trust fund since they “borrowed” it over 20 years. Regardless of what was intended when it started 75 years ago, social security is pure welfare program funded by incoming revenue. The “Trust fund” is a myth.
The Social Security/patroll tax is simply (in round numbers) a 15% flat rate tax on the first $100K of non-investment income, per person, with no deductions. It funds the governments general operations. For most people it is the primary (if not only) income tax they play.
The Republicans should look towards Cain’s “999” as the only proposal that seriously gets rid of the payroll tax.
mark:
“So if this is the FICA tax, why does it still have to be paid for? Let the money just not be available to us when we would collect on it.”
–Social Security is not like your bank which holds “your” money. It still needs FICA revenues to ensure that the Social Security Trust Fund has monies for both current use (payments) and future (through investments). Currently, SSA is paying out approximately $48 Billion more than it collects.
“The answer is, this proves the democrat party to be a bunch of liars because they always claimed there was a lock box & money paid in wasn’t being used for anything else”
–Don’t overstate your case. While Gore famously used the phrase “lockbox,” the concept has been used by both parties for years, including the Republicans who sponsore a “lockbox bill.”
–Social Security funds cannot be used for anything else. However, any excess funds that SSA collects are held in a special fund that must be loaned to the Federal gov’t at interest. When those funds are used on other programs, it’s called raiding the lockbox because it simply means we’re using loaned money and incurring a debt (a debt that is covered by T-Bills that mature over decades).
–Lastly, knowing a number of people who are unemployed these “crazy programs” are keeping a roof over their head and their kids fed. Maybe that’s not the federal government’s job but for now, at least, they aren’t homeless and dying of malnutrition.
No. 2: Your proposed headline is correct.
No. 3: What you know about the funding of social security could fill a book (pause) of FAIRY TALES. (YES, I KNOW, CAPITAL LETTERS DOES NOT MAKE IT TRUE, BUT TRUTH MAKES IT TRUE.)
The FICA tax cut that was just extended is for 2 months, and there is a proposal to extend it for a full year, to be taken up by Congress in a month or so. The purpose of this temporary cut is to put more money in the hands of wage-earners, for the purposes of (i) providing them with needed financial relief in the current, depressed economy, and (ii) stimulating the economy by the spending that will result from wage-earners having more money to spend.
Social Security needs a long-term adjustment to continue its past success, and that can happen as soon as (a) the economy recovers and (b) a sensible congress is elected.
(Readers can write there own wise cracks about clause (b).) The notion that Social Security needs a radical and immediate, short-term fix at the present time is nonsense spread by the opponents of Social Security. It does need a long-term adjustment, but the time for that is after (1) President Obama is re-elected, (2) his Democratic policies are implemented, and (3) the economy begins a sound and sustained recovery.
Is caved the right word? It is a 2 month extension, which means, like most things in Washington, instead of dealing with it now, they punt it ahead only this time only 2 months, so the same sitting congress must deal with it. How it gets dealt with over the next 2 months will determine if the word caved is applicable to any party.
Lets be realistic, does any individual or party want to go down as the one who “raised taxes” on 160,000,000 voters in an election year? No extension, means any W2 employee will feel it, some more than others.
4&5 are proving my point. The entire idea of paying into social security and it would be OUR money upon retirement was a socialist liberal democrat idea. So we prove once again LIBS LIE!
5. What about underemployed like myself who is bleeped because we are making some -but not enough – money? How long should we pay unemployment, 5 years, 6, 7, 10??? Tell me!
The bottom line is… if they feel we shouldn’t pay into it, they shouldn’t come up with some cockamamy scheme to fund it anyway. They are going to be STEALING from each & every one of us who buys or refinances a home.
This is a ponzy scheme & whoever voted for the bill, should be thrown in jail permanently!