Obama's Payroll Tax Grinch Act Could Backfire

Obama's handling of the payroll tax cut debate is another example his failure as a leader.


It is increasingly clear that President Barack Obama's re-election strategy hinges on his ability to convince enough of the electorate that Congress is the problem, not him. He rhetoric on the subject is becoming increasingly strident as he calls out the chamber's Republican leaders for failing to pass a number of his initiatives, most lately the extension of the temporary cut in what employees contribute to Social Security.

It is true that the temporary reduction of the payroll tax rate for the portion paid in by employees does put more money in people's pockets. It is also true that it does almost nothing to stimulate economic growth or job creation. Despite the fact that this is really just another form of economic stimulus, with all that entails, both parties have caved on the issue—almost. The extension is hung up in Congress, but that's because the Democrats who control the Senate and the Republicans in the House cannot agree how to eliminate its impact on the deficit or, to put it another way, "pay for it."

[Read the U.S. News debate on the payroll tax cut.]

The Democrats want to impose a tax on a millionaires—yet again—and use the savings from the draw down of troops in Afghanistan and Iraq—yet again—to make up the difference. And, though they seem to be backing down from the idea of making the millionaire surtax permanent in order to replace the lost revenue from the temporary one year extension, the threat of higher taxes on somebody still remains. The Republicans, by contrast, think they can find the money largely by freezing the pay of government workers, including members of Congress, and by changing to the federal pension program.

It's a considerable impasse and it has provoked the president to the kind of action he is best at: he said something about it.

Speaking to the nation in his weekly radio address Obama proposed canceling Christmas—at least for members of Congress—saying they should not go home for the holidays until the pass the bill. "We're going to keep pushing Congress to make this happen," Obama said. "They shouldn't go home for the holidays until they get this done."

[Check out our editorial cartoons on President Obama.]

The problem with this approach is that the optics don't work. You see, while the House and Senate would be in Washington trying to reach agreement the president and his family will be on a 17-day vacation—in Hawaii.

No one is suggesting the president shouldn't take time to get away with his family during the holiday season. But to argue that Congress needs to remain in Washington working on legislation that is one of his top priorities right now while he heads off to wind surf seems something of a contradiction if not an abdication of leadership.

It may be that he expects Congress to reach a deal before the holiday recess begins, meaning his call for them to remain in town was made more for political effect—and to improve his standing with the voters who are crying out for him to do something, to show some leadership. If so it is an example of how Obama's re-election priorities are already intersecting with is presidential responsibilities. This does not auger well—either for him or for the country—and will probably add fuel to the generally anti-incumbent fires that have just begun burning all across the country.

  • See a collection of political cartoons on the budget and deficit
  • Read about how Obama is trying to channel President Teddy Roosevelt.
  • See an opinion slide show of 10 wasteful stimulus projects.