Payroll Tax Politics: Playing With Political Dynamite

Politico Arena Topic: Payroll Tax a Winning Issue for Dems?


Support for extension of the payroll tax cut really isn’t a role reversal because the Obama administration has always been for middle class tax cuts which the GOP is not very interested in (I believe Paul Ryan used the term “sugar high” to describe the payroll tax cut). Republicans have begun to realize, however, that opposition to middle class tax relief heading into an election year is not only political dynamite, it is hypocritical and paints the GOP as a party only interested in helping the rich.

Once the GOP decides it cannot withstand the political backlash, the argument will shift to how to pay for the payroll tax cut extension. The Obama White House and Congressional Democrats make the case that it should be paid for by the ultra-rich—a popular method according to polls—and force Republicans to go on the record against that offset. Republicans will likely counter with offsets via entitlement reforms or other spending cuts. It is interesting though—what offsets were used to pay for the Bush tax cuts? Or how about the wars in Afghanistan or Iraq? Or the Medicare prescription drug benefit? None. These were very expensive programs which were simply added to the national debt yet the GOP jumped at the chance if it meant their priorities would pass.

In the end, an extension of the payroll tax cut is inevitable—it is too politically damaging to the GOP brand for it not to pass. I expect Congress and the President will have something worked out by the end of the year otherwise the GOP will be handing Democrats and the Obama campaign a big fat Christmas present to campaign on.

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Cain Cain't

Politico Arena Topic: Cain't Gonna Happen?


I am less troubled by the accusations of a long-standing extramarital affair between two consenting adults than I am by the multiple allegations of sexual harassment. A Herman Cain nomination was already a long shot; this new allegation amplifies questions of character and will probably be the final stake in the heart of his candidacy (though this doesn't mean he'll necessarily drop out).

Of course, all this overshadows the fact that Cain is not well versed on important policy matters and is completely ill-equipped to be president. Besides his 9-9-9 plan, which is nothing more than a scheme cooked up on a cocktail napkin, Cain, like Sarah Palin before him, shows little interest in or ability to grasp the important policy challenges facing the country, particularly foreign policy. These allegations in their totality will also disqualify him from consideration as a VP running-mate or for a spot in a future GOP president's cabinet.

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President Obama and Lazy Americans: There is No There There

Politico Arena Topic: Will Obama's 'lazy' comments haunt him?

Well, the comments would be devastating if at all true; however, they were completely taken out of context. Even the Politico article splices up the President’s actual comments. Here is what he said verbatim in response to a question about impediments to investment in the United States:

“I think it’s important to remember that the United States is still the largest recipient of foreign investment in the world. And there are a lot of things that make foreign investors see the U.S. as a great opportunity: our stability, our openness, our innovative free market culture. But we’ve been a little bit lazy, I think, over the last couple of decades. We've kind of taken for granted—well, people will want to come here, and we aren't out there hungry, selling America and trying to attract new business into America. And so one of things that my administration has done is set up something called SelectUSA that organizes all the Government agencies to work with State and local governments where they're seeking assistance from us, to go out there and make it easier for foreign investors to build a plant in the United States and put outstanding U.S. workers back to work in the United States of America. And we think that we can do much better than we're doing right now. Because of our federalist system, sometimes a foreign investor comes in and they've got to navigate not only Federal rules, but they've also got to navigate State and local governments that may have their own sets of interests. Being able to create if not a one-stop shop, then at least no more than a couple of stops for people to be able to come into the United States and make investments, that's something that we want to encourage.”

So, there is no there, there. He’s not calling America or Americans lazy. He is not questioning the character of the American people. He is calling out the American government for not being proactive enough in attracting foreign investment and explaining that the rules and regulations of the American federalist system sometimes create disincentives for foreign business and industry to set up shop in the U.S. Of course the opposition party will try to distort his words for political gain. That’s just part of the game. But an honest reading of his remarks reveals there is absolutely no controversy except in the minds of the consultants and presidential wannabes of the GOP.

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