Why your taxes may go up

How sadly fitting it is that Congress is finishing the year in a fit of tea-party fervor – with working-stiff Americans naturally held hostage.In their latest attempt to gum up the machinery, upstart House conservatives have blocked the bipartisan Senate deal that would extend (for at least another 60 days) the current payroll tax cut. House Speaker John Boehner wanted to OK that Senate deal, but, as we already know, he can’t control his rank-and-file Republican tea partyers. So his new plan was to bury the payroll tax cut deal by casting it into procedural limbo.I’ll spare you the boring legislative arcana, and cut to the chase: In essence, House Republicans voted to raise the taxes of working Americans on the first of the year.This, from the party that prides itself on cutting taxes.How is it possible that the tea-partying GOP would risk giving President Obama such a bountiful holiday gift? Obama has argued for weeks that workers should continue to get a break on their federal payroll tax – because it puts more money into workers’ pockets and pumps much-needed consumer spending into the economy – and he has urged the GOP to cooperate. The GOP had a choice: it could go along (and why wouldn’t it?), or it could thwart short-term economic progress and look heartless in the process.Thanks to its tea-partying element, the GOP has opted for heartless.It all started earlier this autumn, when Obama urged a one-year extension of the payroll tax cut, through the end of 2012; he proposed recouping the lost revenue by modestly raising taxes on the richest Americans. Naturally, the latter idea was anathema to the GOP – which is adamant about loyally servicing the one percent (as I noted here recently). So goodbye to that idea. House Republicans countered with a plan of their own: a new 12-month payroll tax break, albeit coupled with hefty cuts in jobless benefits, cuts in the health reform law, and looser anti-pollution rules. Democrats said no to all that. Meanwhile, on the Senate side, Democrats were so eager for a payroll tax deal that they caved to the GOP and erased Obama’s levy on the rich. They also agreed to the GOP’s demand that Obama make a speedy decision on a proposed oil pipeline that environmentalists oppose. They also agreed to table the 12-month tax-break timetable (at least for now), in exchange for an interim extension of 60 days. A bipartisan deal was duly struck this past weekend, and supportive Senate Republicans clearly expected that Boehner would lead his House troops to a thumbs-up vote.Instead, the House tea-partyers rebelled. In their view, the deal doesn’t have enough right-wing sweeteners; federal programs haven’t been slashed enough, that sort of thing. Predictably, their intransigence ticked off the Republican senators, some of whom recognize that it’s bad politics to oppose tax breaks for average Americans. Witness Scott Brown, who faces a competitive 2012 race in blue-state Massachusetts; yesterday, he complained that “the House Republicans’ plan to scuttle the deal to help middle-class families is “irresponsible and wrong.”Today, House Republicans didn’t actually cast a thumbs-down vote on the tax cut. They didn’t want to go on record so blatantly. Instead, tea-party hostage Boehner arranged to smother their obstructionism in parliamentary euphemism: they voted Yes on the creation of a House-Senate conference committee, which would then be required to rework the deal during the Christmas holidays. In plain English, that’s equivalent to killing the whole thing, because Senate leader Harry Reid says the deal was the deal, and that his chamber is done for the year. (We’ll see whether he and his allies cave on that. They are, after all, Democrats.)The House GOP’s obstructionism would appear to be politically risky, given current public sentiment. As I’ve noted before, landslide majorities favor a tax hike on the rich. (That’s off the table.) A recent Associated Press-GfK poll says that nearly six in 10 Americans favor extending the payroll tax cut for the working and middle class. And a new ABC News-Washington Post poll says that when Americans are asked whom they trust most to protect the middle class, 50 percent choose Obama while only 35 percent choose the congressional GOP.But those Republicans are betting that most Americans will simply tune out the details of 2011’s final legislative fiasco; and that if payroll taxes do rise on Jan. 1, most Americans will simply blame both parties for failing to work together – with collateral damage to Obama, who, after all, vowed to change the tone in Washington. Indeed, Obama’s prospects next November may hinge in part on whether he can minimize that damage, and instead cast himself as the good guy doing battle with a recalcitrant tea-partying Congress. The fate of the payroll tax cut, and the manner in which it is spun, will help shape that narrative. ——-Follow me on Twitter, @dickpolman1