With Economy Faltering, Dems Seize On GOP About-Face On Payroll Tax Cuts For Businesses

June 22, 2011 1:45 a.m.

Democrats are increasingly concerned that Republicans are setting them up to endorse large spending cuts in a deal to raise the national debt limit without giving ground on anything — even GOP-friendly policy measures like tax cuts for business owners — to stimulate the economy in the near-term.

The concern arises as numerous top Republicans react coldly to the prospect of temporarily reducing the payroll tax burden on employers and employees — to juice the economy before federal spending draws down in the years ahead.

Traditionally, and particularly in tough economic times, this and a handful of other stimulative policies have enjoyed bipartisan support. But with the outcome of the 2012 election likely to hinge on the nation’s economic trajectory, the GOP is mysteriously rethinking those positions. And Democrats are starting to note of the suspicious timing.“I don’t like to question my colleagues’ motives,” noted Senate Majority Leader Harry Reid (D-NV) during his weekly Capitol press conference Tuesday, “but whether work with us to pass these policies, or continue opposing ideas they once supported, will tell us a lot.”

Republicans aren’t taking payroll tax cuts off the table — they say they’re not taking anything off the table except tax increases. But in an exceedingly unusual development, Republican leaders are shrugging off an opportunity to cut taxes.

“We don’t need short-term gestures,” said Sen. Lamar Alexander (R-TN), the chair of the Senate Republican conference. “We need long-term fundamental changes in our tax-structure, in our regulatory structure that people who create jobs can rely on.”

Last week, House Speaker John Boehner declined to weigh on the merits of the payroll tax cut, but. But his sights are clearly elsewhere. “The uncertainty that’s out there is not going to be overcome by, you know, another little short-term gimmick,” he said of traditionally bipartisan stimulus measures.

Democrats are trying to turn this sort of agnosticism into a political win-win. As one top Democratic aide noted to me, “Senate Democrats at first weren’t wild about the idea [of an extended payroll tax cut] when it was floated by the White House, but they now see an opportunity to put Republicans on record on this and either get something done on jobs or, if the GOP follows through on opposing it, show how anti-jobs they are.”

If their public and private statements are any indication, Democrats may be left with nothing but a rhetorical cudgel.

At his weekly Capitol meeting with reporters, I asked House Minority Whip Steny Hoyer whether Republicans identify, in private conversations, any temporary stimulative measures they could support as part of a debt limit deal that also involves large spending cuts.

“I don’t know that I would say near-term stimulus,” he said. “I’m trying to think of a specific example from people that I’ve talked to, and I can’t come up with that.”

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