Pass the payroll tax cut, now

Michael Needham CEO, Heritage Action for America
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Washington is broken, but it is not because of a lack of ideas. Rather, it is because some prefer obstruction and demagoguery over substance and solutions.

Such is the case with the payroll tax cut.

Sensing a partisan political advantage, President Obama and Senate Majority Leader Harry Reid (D-NV) have sought to portray conservatives and Republicans as wanting to raise taxes on hard-working Americans. Nothing could be further from the truth; in fact, it is their policies — not ours — which will lead to massive tax increases on hard-working Americans.

The Democrats’ political strategy is totally divorced from any single policy objective or long-term strategic policy goal. Instead, it is a plan to divide and demagogue the opposition. It is designed to obscure the Democrats’ policy failures — stubbornly high unemployment, soaring gas prices, continued foreclosures, rising health care costs and yet another trillion-dollar deficit.

Yesterday, House Republican leaders wisely decided it was time to turn the tables. Instead of allowing an extension of the payroll tax cut to languish in a conference committee infested with obstinate Democrats who are demanding job-destroying tax hikes as a “pay for,” they decided to bring forward a clean extension that will run for the remainder of the year.

While Heritage Action has not been shy in our disagreements with House leaders on certain issues, we can say unequivocally that this is the right move. Democrats on the conference committee were not genuine negotiating partners. They simply desired bi-monthly fights on the tax cut from now until the elections.

Doing this kabuki dance every two months is bad politics and absolutely terrible policy.

To be clear, conservatives understand the extension of the payroll tax cut is not an effective stimulus. If stimulus is the goal, we should focus on tax cuts that actually create growth, things like permanent reductions in rates or ending double taxation.

That said, a 10-month extension of the payroll tax cut is decent policy, unpinned by conservative principles. And it will have the additional benefit of allowing conservatives to refocus the conversation. The American people deserve a real debate about the future of our country, and that cannot happen when President Obama’s demagogue and denial machine is running at full speed.

As I wrote with Senator Mike Lee (R-UT) last month, Republicans should not play into the president’s cynical political strategy and, instead, show Americans that good policy is also good politics. Two thoroughly conservative principles govern this position.

First, as conservatives, we believe individuals can spend their own money better than the government. We have never been and never will be in favor of allowing the government to control more of our hard-earned money. That same principle applies for those concerned about the Social Security Trust Fund. The rate of return on Social Security is paltry. If we truly believe in the power of individuals and their entrepreneurial abilities, it makes sense to allow individuals to keep their own money so they can invest in personal retirement accounts.

Second, we do not believe there is a cost associated with allowing people to keep their own money. To believe that tax cuts must be offset is to accept the steadfast liberal claim that the money belongs to government, not the individual. It also tacitly acknowledges that tax increases are fair game for decreasing deficits (setting aside the practical concerns that tax hikes hurt the economy and encourage more spending).

Accepting the logic of the left not only makes for bad policy, but it also boxes conservatives in when it comes to consideration of the 2001 and 2003 tax cuts. By accepting the premise of paying for tax cuts, we will be faced with the need to find trillions of dollars in offsets at the end of the year. But with President Obama prepared to veto any meaningful spending reforms, we are all but guaranteed that those job-creating tax cuts will die, including those for the middle class.

When Americans go to the polls in November, they will be casting a ballot in favor of one of two visions: President Obama’s crony-ridden big government and big bureaucracy, or a conservative vision committed to more freedom, more opportunity and more prosperity. That is a debate any conservative should welcome, but we cannot make the case clearly when we are on the wrong side of tax increases and falling prey to the left’s demagoguery.

It’s time to take the payroll tax issue off the table and move on to a real debate about the future of our nation.

Michael A. Needham is the chief executive officer of Heritage Action for America.