Cut your losses, Speaker Boehner

UPDATE: Speaker Boehner and House Republicans caved Thursday evening. They will do what they should have done days ago -- adopt the temporary extension.

My original blog, filed Thursday morning:

House Speaker John Boehner is cornered on the issue of extending the payroll tax cut. The leader of the Republican House majority should call for a vote on the two-month extension approved overwhelming by the Senate. Get it approved, go home for Christmas and live to fight another day.

The White House just issued this statement after Boehner and President Obama spoke.

THE WHITE HOUSE
Office of the Press Secretary
FOR IMMEDIATE RELEASE
December 22, 2011

Readout of the President's Call with Speaker Boehner

Speaker Boehner called the President this morning and the President reiterated to the Speaker that the only viable option currently on the table is for the House of Representatives to pass the bipartisan Senate compromise that received the support of nearly 90 percent of the Senate.

The President told Speaker Boehner that he is committed to begin working immediately on a full-year agreement once the House passes the bipartisan Senate compromise that prevents a tax hike on 160 million Americans on January 1.

In other words, President Obama is not going to blink. If Boehner and House Republicans refuse to adopt the Senate measure and let the tax cuts expire, the president will politically bludgeon the Republican Congress. It will cement his election argument that the GOP is the party of the rich, ready to defend the tax cuts given to the wealthiest citizens but unwilling to provide the same benefit to a struggling middle-class.

This is largely a political and, to a degree, psychological debate. Adopted a year ago, the payroll tax for Social Security dropped from 6.2% to 4.2%. That is not going to dramatically alter the economy one way or the other. But to let the tax elapse is political suicide for the Republicans and could, at a psychological level, give consumers pause about spending and small businesses about hiring.

Boehner and his tea-party House members want a one-year extension. The Senate could not reach a compromise to do so. The House Republican's only option, politically, is to approve this short-term deal and come back and fight it out in the new year. The conventional wisdom is that if Boehner allows a vote, enough moderate Republicans will join Democrats to pass this thing.

In a recent editorial, The Wall Street Journal called Boehner's handling of the issue a fiasco.

"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," wrote the WSJ.

"At this stage, Republicans would do best to cut their losses and find a way to extend the payroll holiday quickly," concluded the editorial.

Good advice, Mr. Speaker.

@Jack

No kiddin' it's manufactured, like the fairy tale about how you can't raise the taxes on the job creators. But it's a great political issue and Boehner spit the bit.

The Speaker and House Republicans had a chance at real Social Security reform when Obama offered by the grand bargain. They blew that too.