CASSIDY: Washington Dysfunction And The Payroll Tax

Last week, House Republicans passed the Middle Class Tax Relief and Job Creation Act of 2011. The areas of agreement between House Republicans and President Obama have been far and few between, but this bi-partisan legislation did exactly what he wanted. The bill extended the payroll tax cut for a full year, reformed unemployment insurance, and ensured that seniors will continue to have access to Medicare providers. (A full breakdown of the differences between the House and Senate bill can be found HERE).

However, when the legislation went to the Senate, Harry Reid changed the bill to extend the tax cuts for only two months, not twelve. Americans deserve better than a two-month ad hoc policy which independent agencies say is unworkable and will cause “substantial problems” for employers by increasing their costs.

To make a bad bill worse, Senate Democrats paid for this two-month extension with a 10-year tax on home mortgages. It makes no sense to make Americans pay for ten years to provide two months of relief. Democrat Senator Joe Manchin called the Senate version of the bill a “failure for the American people.” After the Senate version passed, Harry Reid sent the Senators home for Christmas vacation – dysfunctional Washington at its worst.

There is time to get this correct. This is a payroll tax cut so the benefits accrue over a year. If Harry Reid decides not to interrupt the Senate recess, the worst that will happen is that someone paid in mid-January will pay 2% more in taxes on that paycheck. As an example, this would be $3 more in taxes for someone whose take-home pay is $1500.

That the benefits of the tax cut are minimal in the beginning, gives an opportunity to address the dysfunctional process. When the House and the Senate disagree over legislation the Constitution provides a mechanism to address, it is called a conference committee. When the Senate passed a different version, House Republicans immediately came back to DC to work out the difference and appointed negotiators to work with the Senate. Yet, Harry Reid refuses to call back the Senate. President Obama, who only a few weeks ago supported a yearlong extension as good policy, decided to score partisan political points by criticizing House Republicans for not agreeing to what Joe Manchin called “disgusting” (in reference to a 2-month fix and not a 12-month).

The American people want government to function as the Constitution directs. As important as it is to get the policy correct is to repair how the policy is drafted into law. This is beyond the policy debate of 2 months versus 12 months but perhaps even more important. Most Americans assume that this would be important to the President of the United States and the President of the Senate. Let’s hope that it is.

Congressman Bill Cassidy represents the sixth district of Louisiana and serves on the House Energy and Commerce Committee.