Did the Republicans suffer a disastrous and humiliating defeat when they “caved in” and agreed on December 22 to accept the two-month extension of the payroll tax holiday that had been passed in the Senate with strong bi-partisan support? The Democrats and their mainstream media allies were high-fiving and gloating about an early Christmas. Chris Matthews called it a “rub it in their face moment.” In this instance, even many in the conservative media were heaping criticism on the way the Republicans, particularly the House GOP, handled this matter.
The Wall Street Journal editorial page came down hard: “The GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play…Republicans have also achieved the small miracle of letting Mr. Obama position himself as an election-year tax cutter, although he’s spent most of his Presidency promoting tax increases and he would hit the economy with one of the largest tax increases ever in 2013. This should be impossible.”
There is no question about it. In terms of coordination between the Republican leadership in the House and Senate, this was a blunder, which allowed President Obama to seize the stage as if he and the Democrats were the party advocating tax cuts for the middle class, while the Republicans were standing against such cuts, and ergo, against middle class working people.
The columnist Charles Krauthammer wrote, “making economic sense is not the point. The tax-holiday extension—presumably to be negotiated next year into a 12-month extension—is the perfect campaign ploy: an election-year bribe that has the additional virtue of seizing the tax issue for the Democrats.” He added that “The House Republicans’ initial rejection of this two-month extension was therefore correct on principle and on policy. But this was absolutely the wrong place, the wrong time, to plant the flag. Once Senate Republicans overwhelmingly backed the temporary extension, that part of the fight was lost. Opposing it became kamikaze politics.”
That may be true, but in terms of substance, and even long-term perception, was it really such a victory for Obama and the Democrats? Was it really such a defeat for Speaker of the House John Boehner (R-OH) and the House Republicans? If the media get their way, then the answer will be yes. But it’s worth taking a look a little deeper to see what happened during the process, and the nature of the Democrats’ victory.
One person who caved, though the media hardly took note, was President Obama, who had insisted on December 7 that “Any effort to tie Keystone to the payroll tax cut, I will reject. So everybody can be on notice.” He was referring to a decision on the proposed $7 billion, 2,100 mile Keystone oil pipeline from Canada down to U.S. Gulf Coast refineries that he had attempted to postpone until after the upcoming November election so as not to offend either of two constituencies with a direct interest in his decision—Big Labor and radical environmentalists. He was hoping to avoid angering either group before the November election, but now, according to the agreement, he has to make a decision within two months, well before the election.