This week, House Republicans, lead by the Tea Party, ensured millions of working Americans would have a very unpleasant start to the New Year. Following a year of hyper political partisanship, the final days of legislative business were used to block a bipartisan Senate bill that will result in the expiration of a middle class tax cut on December 31.
With the deadline fast approaching, lawmakers introduced several proposals to extend the payroll tax cut. Senate Democrats proposed a plan to offset the cost of extending it with a one percent surtax on annual incomes over one million dollars a year. Republicans put forward plans to offset a payroll tax cut by, among other things, extending the federal employee pay freeze, reducing the federal workforce, increasing federal employee retirement contributions, and sharply reducing unemployment benefits despite prevailing high unemployment rates.
Enacted in 2011, the payroll tax credit provides a roughly $1,000 tax cut to middle class families, putting money into the pockets of families who need it and boosting our struggling economy. The bipartisan Senate proposal, agreed to by Senators Reid and McConnell, would temporarily extend the payroll tax cut until February 29, 2012.
Another critical component of payroll tax cut negotiations is the extension of unemployment insurance. Allowing unemployment insurance benefits to expire means 1.8 million uninsured individuals will lose their unemployment benefits during the holidays. In Virginia this would mean unemployment benefits, currently available for over 70 weeks, will be available for just 28 weeks. This coming at a time when 43 percent of the 13.3 million unemployed nationwide have been looking for work for 27 weeks or longer.
Last week Congressional leaders arrived at a reasonable compromise to temporarily extend both the payroll tax cut and unemployment insurance for two months until a deal on a long-term fix can be reached.
This compromise passed overwhelmingly in the Senate and even received initial support from Speaker John Boehner, who called the compromise a “good deal.” Unfortunately, in the days following Senate passage of this temporary extension, Tea Party House Republicans squandered a rare opportunity for bipartisanship and rejected this compromise. While an imperfect solution, the Senate’s bill gives immediate help to those who need it while Congress works out a year long agreement.
Extending the payroll tax cut and unemployment insurance is an important step in improving our economy, putting money into the pockets of those who need it most. Failure to extend these provisions for average Americans is irresponsible and a sorry demonstration of Republican willingness to hold American families and the economy hostage to prove a political point.
Rep. James Moran (D) is Virginia’s 8th Congressional District Representative in the U.S. House of Representatives.