Payroll taxes: Is anyone actually listening to Obama?

I don’t mean that headline question glibly. What I mean is: Are people paying attention to the president’s words and thinking critically about them?

Obama’s remarks yesterday about extending the payroll-tax holiday enacted last year put the question in my mind. Once we get past the usual rhetoric about “doing everything that I can, every single day, to create jobs faster” and how members of the middle class can’t afford a $1,000 tax hike “right now” — remember, Obama’s benevolence always comes with an expiration date — we can see he’s making three main political points:

1. “I know many Republicans have sworn an oath never to raise taxes as long as they live. How could it be that the only time there’s a catch is when it comes to raising taxes on middle-class families?”

Obama comes to this alleged “catch” only after misrepresenting Republicans’ position. It’s true that they voted against his proposal to extend the payroll-tax holiday. But they have also been working on other bills to extend it. The president is counting on a lot of people catching a bit of his remarks today without having followed the issue very closely.

But what makes this part of his argument doubly perplexing is that he uses the “oath” — we can assume he’s referring to the Taxpayer Protection Pledge — as a club against the GOP for not supporting his bill, even though his bill would have raised taxes on those good ol’ “millionaires and billionaires.” He’s basically saying: Hey, Republicans, don’t violate your anti-tax-raising oath by opposing my bill, which raises taxes on some people!

Huh?

2. “Now, some Republicans who have pushed back against the idea of extending this payroll tax cut have said that we’ve got to pay for these tax cuts. And I’d just point out that they haven’t always felt that way. … Indeed, when the Republicans took over the House at the beginning of this year, they explicitly changed the rules to say that tax cuts don’t have to be paid for. So forgive me a little bit of confusion when I hear folks insisting on tax cuts being paid for.“

Is the president seriously chastising Republicans here for claiming to be more fiscally responsible than a) they used to be, and b) the rules of the House say they must be? I understand he’s trying to accuse them of hypocrisy, but isn’t it a little odd to accuse them of hypocrisy that makes them more responsible?

3. “I’m willing to work with Republicans to extend the payroll tax cut in a responsible way. What I’m not willing to do is to pay for the extension in a way that actually hurts the economy.”

As far as I can tell from the Congressional Budget Office’s scoring, the Senate Republican proposal of Nov. 30 proposes to “offset” the $119.6 billion in reduced payroll taxes during the 2012 and 2013 fiscal years with direct spending cuts during those years totaling …

… wait for it …

… $79 million.

That’s “million” with an “M.” The proposed direct spending “cuts” don’t surpass even $1 billion in any single year until 2020. Its net effect is to increase deficits by $110 billion between 2012 and 2021.

Even if you interpret the bill most charitably, and assume the proposed changes in spending caps will actually transpire, the GOP is talking about cutting spending by only $6.6 billion in 2012 and 2013, while revenues fall by nearly $120 billion.

Neither Obama’s jobs bill — which would lead to an increase in deficits of $285 billion — nor the GOP’s proposal can truly be described as “responsible.” But it strains credulity to suggest reducing federal spending by between one-hundredth of 1 percent and one-tenth of 1 percent of the expected spending during fiscal 2012 and 2013 — “hurts the economy” while it’s still fragile.

To be fair to the president, maybe I should rephrase my opening question. Rather than asking whether anyone is listening to him, let me ask: Can any taxpayer afford not to listen to him?

– By Kyle Wingfield

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