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The Deceptive White House $40 Payroll Tax Campaign

President Obama Thursday misled workers with his “$40” PR campaign, suggesting workers would lose double the amount they actually would if House Republicans failed to accept the Senate measure extending the payroll tax holiday for two more months.

Twice during remarks at the White House, Obama indcated voters would pay $40 extra in taxes per weekly paycheck. But by the White House’s own calculations, an average family  making $50,000 annually would lose about $1,000 per year from their earnings, or a little more than $40 out of every biweekly paycheck.

Here’s what Obama said:

Anyone who knows what it’s like to stretch a budget knows that at the end of the week, or the end of the month, $40 can make all the difference in the world . . . So on Tuesday, we asked folks to tell us what would it be like to lose $40 out of your paycheck every week.

At no point in his remarks did he suggest he was talking about a biweekly paycheck. And nowhere on the White House website page trumpeting the $40 campaign does it say the campaign refers to a biweekly paycheck.

The $40 campaign was the final salvo in a White House PR war that eventually forced House Republicans to capitulate on their demand that the Senate negotiate a full -year extension before the payroll tax cut expired on Jan. 1.

While most companies do payroll biweekly, many workers still receive weekly paychecks, and they would only have lost about $20 per check, not $40. They could easily have perceived, from what they heard out of the White House Thursday, that they would be losing $40 in each of their weekly paychecks.

And those receiving biweekly checks could well have understood the White House to be talking about weekly checks and figured they would actually be losing $80 per paycheck

Adding to the White House obfuscation is that maintaining the tax cut for two months will be paid for under the legislation by a new fee – lasting ten years, not two months – that will bump up payments for new mortgages and refinances.

According to one report, the new fee would result in a $15 per month added payment on an average $200,000 mortgage, or about $180 a year. That would erase the savings from a two-month extension of the payroll tax cut in just a year for families taking out new mortgages of this size or greater – and obliterate it over ten years.

Obama Launches “$40” Payroll Tax Cut Campaign

President Obama is stepping up his PR war against House Republicans with a just-scheduled 12:15 pm ET appearance at the White House to tout a new campaign highlighting the tax break families will lose if the partial payroll tax holiday is not extended.

From the White House:

In the afternoon, the President will continue to urge House Republicans to do what’s right for the American people by allowing a vote on the short term bipartisan compromise passed by almost the entire Senate.  If Congress fails to extend the payroll tax cut, the typical family making $50,000 a year will have about $40 less to spend or save with each paycheck.

Obama will point people to a new section of the White House website where they can “share what a $40 paycheck means to them.” In addition, he’ll urge them to make use of a new Twitter hashtag, #40dollars.

The White House has also rounded up a group of citizens “who would see their taxes go up” to appear alongside Obama. Unclear if they’ll recite their assuredly heart-rending tales of prospective woe.

Obama has been demanding that House Republicans move a two-month payroll tax cut extension approved by the Senate.

Obama today will leave unsaid, of course, that everyone’s taxes will also go up if the Senate fails to return and act on the House-passed year-long payroll tax cut extension.

White House Playing Chicken with Payroll Tax Cut

Sometimes, people turn logic on its head. Sometimes, they turn logic on hits head and lift the body and bang the head repeatedly into the floor.

President Obama and his spokesman, Jay Carney, in league with Senate Majority Leader Harry Reid, today began a political game of brinksmanship with the payroll tax cut – all while accusing Republican of playing a  political game of brinksmanship with the payroll tax cut.

The Senate last week passed a bill extending the payroll tax cuts for two months. The House today passed a bill doing it for a year. The House now wants to have a conference committee to iron out the differences.

THIS IS WHAT IS KNOWN AS REGULAR ORDER. That is, it’s the normal way of doing business. But the Senate left town after passing its version and ain’t coming back

The White House is throwing a massive hissy fit because the House didin’t do what was expected of it – that is, just pass the Senate version. I think there’s some truth to the White House claim that it thought it had at a least a signal from Speaker Boehner that he would do just that. But Boehner, whom senior Obama aides privately scorn as an ineffective, incompetent leader, suddenly figured out his caucus doesn’t like the idea, and backtracked.

Boehner often seems to have no idea what his caucus is thinking, because Boehner is a Washington insider, and his caucus is filled with people who were sent to Washington to screw Washington insiders.

But let’s assume everything the White House thinks about Boehner and House Republicans is true. It’s not, but lets assume it is. The fact remains that the only way to get a deal done now is to call the Senate back in. But Reid doesn’t want to interrupt the senators as they go about baking their Christmas hams, and Obama agrees.

Remember, it was the Senate, not the House, that violated Obama’s demand not to leave town until the payroll tax cut extension was complete. And it was not complete when the Senate left.

If Obama really is so deeply distressed about the prospect of payroll taxes going up at the end of the year as scheduled, he’ll demand the Senate get its collective ass back to Washington.

A deal could be reached fairly easily.

Unless – unless, wait a second – unless Obama thinks it’s more important to get a political advantage out of trying to blame Republicans for allowing the tax to increase.

And that two-month extension in the Senate bill is, BTW, just too priceless to give up. It means that Obama would get a chance in January to start bashing Republicans again on the issue while they try to negotiate a full-year extension.

Boehner’s change of heart was due to a principled group of Republican Tea Party members willing to stay in town to get a bill done. Obama hopes to turn them into savage payroll tax cut eaters. He may get some political gain. At your expense.

 

White House Caves on Payroll Tax Extension

The White House this evening agreed to a two-month extension of the payroll tax cut, bowing to Republican demands that it include a provision forcing a faster decision on the whether to allow the Keystone pipeline to extend from Canada deep into the United States.

Obama and his Democratic allies had already given in on GOP demands that the extension be paid for with a new tax on upper income earners. In addition, the White House had also abandoned its effort to link the payroll tax to passage of a budget as a lever to try to keep Congress in town long enough to approve the payroll tax measure.

But with the limited extension, Obama salvages something of a political victory because he will soon be able to return to his campaign to seize the tax cutting high ground from Republicans. As negotiations for a further extension heat up again by  January, Obama is sure to revive accusations that Republicans don’t want to support tax cuts for average workers.

White House Threatens Shutdown Over Payroll Tax

Practicing the very kind of political gamesmanship it accuses Republicans of playing, the White House today indicated President Obama would shut down the government if Republican have not agreed to an extension of the payroll tax cut he supports.

“What the president is not willing to do is leave town or allow Congress to leave town without ensuring that 160 million Americans do not see their taxes go up next year, on average $1,000,” said White House Press Secretary Jay Carney. “They should pass a payroll tax cut extension, extension of unemployment insurance, and they can finish the spending bill all before leaving on their vacation.”

The government runs out of money Friday, and Congress must pass either a budget or agree to another “continuing resolution” that keep things afloat while work on the budget continues.

Senate Majority Leader Harry Reid, according to various reports, is signed on the strategy and is intentionally slow-walking a nearly-completed bipartisan budget deal to try to prevent Congress from acting on it until Republicans agree to a payroll tax cut extension Obama supports.

House Republicans are currently trying to move a payroll tax and unemployment insurance extension bill, but Obama opposes it because it would force him to speed up a decision on whether to approve construction of the Keystone pipeline from Canada into the United States. Environmentalists oppose the pipeline, but Republicans and some unions say it will created jobs.

The White House in recent days has repeatedly bemoaned Republican efforts to tie the Keystone pipeline to the payroll tax bill, charging the GOP with cynically mixing unrelated issues.

Now the White House itself is playing the same type of game – though on a far larger scale – by holding the entire budget hostage to the payroll tax.

Carney said today Obama would sign a CR, but if he gets a budget instead, Carney suggested, Obama will not sign it.

“What we simply cannot allow is the Republicans to take care of the spending bill and leave town because the absolute effect of that will be a tax hike for middle-class Americans,” he said.

Obama Suggests Payroll Tax Holiday is on the Table

President Obama today said that the White House will continue to work with businesses to seek other ideas to spur hiring and revive the economy, suggesting that a payroll holiday is one of the options.

“We are willing to look at any idea that’s out there” that might help the economy, Obama said during a “town hall” style event on CNBC. Obama noted that the White House had been looking at the idea, and while not specifically endorsing it, declined to rule it out.

Some analysts thought Obama might announce a payroll tax holiday earlier this month when he rolled out his latest batch of “stimulus” measures, but he left it out of the package, which included incentives for capital expenditures, making the research and development tax credit permanent, and new money for roads.

Obama didn’t repeat the anti-Wall Street rhetoric that he has expressed in the past, but nor did he apologize for it when asked when he would stop treating Wall Street “like a pinata.” Instead, his message was, “get over it.”

It’s a two-way street. If you’re making a billion dollars a year after a very bad financial crisis, where eight million people lost their jobs and small businesses can’t get loans. Then I think that you shouldn’t be feeling put upon. The question should be how can we work with you to grow the economy?