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There have been so many games of chicken on Capitol Hill in 2011 that it seems appropriate to end the year with the most irresponsible one yet. And even though the outcome will affect virtually everyone who gets a paycheck, no one seems to know whether it will end with a crash or a deal.
On Saturday, the Senate overwhelmingly passed a two-month extension of the payroll tax cut and unemployment insurance, which expire in 12 days. It was a poor half-promise to middle-class and low-income workers. But at least it kept cash flowing into wallets while negotiators worked out a long-term plan.
Speaker John Boehner had previously signaled his approval, but was immediately pilloried by the far-right members of his own caucus, and backed off. (Mr. Boehner seems to specialize in making deals he can’t deliver on. Remember last year’s debt-ceiling fiasco?) What happened next was almost amusing: The House Republicans, who had tried to kill the tax cut outright, claimed they were merely holding out for a more permanent deal. Republicans who drove the government to the brink of credit default earlier this year, in the debt-ceiling fight, were suddenly found on television saying that a two-month tax cut extension didn’t provide enough certainty to businesses and workers.
That’s the kind of ridiculous spin the Republicans need, because the tax cut could very well die. Senate Majority Leader Harry Reid said that if the House rejects the two-month extension this evening, he will not re-open negotiations to pass it.
There are still a few possible ways to avoid a tax increase. In theory, only 26 House Republicans would have to join all Democrats to approve the Senate compromise. Four moderate Senate Republicans, Scott Brown, Dean Heller, Richard Lugar and Olympia Snowe urged them to do just that today.
That vote, however, seems unlikely, since it would be such a blow to the party leadership in the House. More realistically, the House will vote it down, and President Obama will then go on television to demand that Congress negotiate a conclusion on behalf of the middle class. Harry Reid will then try to call back the Senate.
That would only get the parties back to the table, where the looming question remains unresolved — how to pay for the extension. House Republicans want to cut middle-class programs, Democrats want to raise taxes on millionaires, and neither seems inclined to give ground. The final outcome will probably involve some combination of higher mortgage fees and the gimmick of counting savings from drawing down troops, among other methods.