House Republican leaders on Monday backed down on their demand to offset the costs of extending the payroll tax cut for the remainder of 2012.The opposition to the tax cut and the demand that they get a pound of flesh in return showed the Party of No at its most negative.
The election-year move marked a major concession for Speaker John Boehner (R-Ohio) and his lieutenants, who are seeking to avoid a rerun of the resounding political defeat they suffered in December on the same issue.
In their joint statement Monday, Boehner, Majority Leader Eric Cantor (R-Va.) and Majority Whip Kevin McCarthy (R-Calif.) announced that Republicans would unveil a bill simply extending the payroll tax cut through December.
The recent history of the Republican Party up to the election of President Obama was one of supporting tax cuts and specifically ruling out compensating spending decreases. Republicans took this approach in passing the 2001 and 2003 tax cuts, which never had fully offsetting spending decreases and in numerous temporary adjustments to the Alternative Minimum Tax.
Republicans have continued to make the argument, though in the context of keeping tax cuts in place for the wealthy.
Republicans have wised up and moved to cut their losses on this one. Regrettably, in holding up this tax cut, they needlessly contributed to several additional months of policy uncertainty.