Posted at 9:04 AM on December 23, 2011
by Paul Tosto
Filed under: Economy
The Washington Post this morning has a good look at the possible next roads on the payroll tax cut, once the extension is passed today.
Excerpts from the Post.
One possibility is that the Republicans decide that fighting the payroll tax cut is simply too much trouble. If that's their conclusion, then the next extension might pass easily. But another possibility is that House Republicans are furious at having been forced to buckle this time, and their takeaway is that, next time, they need a better strategy... In that case, the next extension will be an even heavier lift.
By the same token, the lessons the Democrats' took matters, too. And that one seems easier to predict: don't spend too much time negotiating with Republicans...That said, Democrats have gotten two more months of most of what they negotiated in the 2010 tax deal in return for, well, pretty much nothing.
If they get a full year, that deal will look better and better. At the time, the trade was that Republicans got about $125 billion in high-income tax cuts and Democrats got a bit more than $200 billion in the payroll tax cut, unemployment benefits, and sundry other stimulus provisions. If most of those provisions are extended through 2012, then Democrats will have gotten $400 billion -- or perhaps even a bit more -- in stimulus in return for that $125 billion in upper-income tax cuts.