Senate fails to pass payroll tax break extension

The Senate rejected two different plans for extending the payroll tax holiday for another year, and it mostly went along party lines. At the bottom of it all was the usual discussion we’ve been seeing on every spending issue for some time now: whether to pay for it and how to do so if they would.

The Senate late Thursday rejected competing partisan visions for extending a temporary tax break that benefits virtually every American worker, clearing the way for more serious negotiations over how to cover the cost of the tax cut.

All but a handful of Democrats voted in favor of their party’s proposal, but in a surprising turn, more Republicans voted against the GOP plan than in favor of it. Senate Minority Leader Mitch McConnell (R-Ky.) predicted this week that a majority of his conference would vote for the party’s plan to extend the payroll tax cut.

The vote suggests that rank-and-file Republicans remain divided on the merits of keeping the tax cut, leaving their party vulnerable to criticism from Democrats that they would raise taxes on the middle class as Americans are struggling economically.

I’ve been watching this play out on the 24/7 news channels this morning, and it’s pretty much along the lines that I predicted earlier in the week. On CNN and MSNBC there are sad eyed sages, nodding their heads in somber fashion, bemoaning how sad it is that the Republicans are “willing to raise the taxes on tens of millions of hard working Americans” while protecting tax cuts for the most wealthy. On FOX they’re discussing how the current scheme is bleeding the Social Security system dry without providing any viable means to make up the shortfall.

Of course, each side has proposed some method of paying for it. The Democrats are more than happy to put a surtax on millionaires to cover the tab, but that’s not going anywhere. The GOP has offered a plan where government employees can take a pay freeze to reduce the overall government bill. Of course, the unions aren’t having anything to do with that one.

It’s an interesting position that the unions are putting the Democrats in, though. In essence, they’re being forced to die on a hill where they don’t want to agree to have a bunch of people who have jobs – and fairly comfortable government ones at that – to accept a pay freeze, while a massive number of people have no job at all. I wonder how that will play next November?