With one week left until Congress is scheduled to adjourn for holiday recess, Senate Democrats are considering dropping a millionaire surtax designed to pay for a payroll tax break to 160 million Americans.
The 2 percent surtax on income of those making $1 million or more (revised down from 3.25 percent), was loathed by Republicans and, according to Politico's Jake Sherman and Manu Raju, Senate Democrats are "seriously" looking to replace it with a "series of cost-cutting offsets that can win GOP backing, according to people familiar with the talks." The goal is to present an end-of-year payroll tax plan on their terms while casting the party as a reasonable broker.
The potential compromise would be the second development making life easier for House Speaker John Boehner, whose colleagues have been deeply skeptical of a payroll tax compromise. The first helpful development was President Obama's Wednesday threat to veto a Republican proposal that includes a provision on the controversial Keystone XL pipeline. According to The Hill's Russell Berman, Erik Wasson and Bernie Becker, the idea that Obama would reject the proposal has inflated support for it among rank-and-file Republicans. "Boehner defied the president on the issue and won over many skeptics in the process," writes the paper. Rep. Jeff Flake of Arizona tells the paper “The difference between this conference and the last one was palpable. I think a lot of it was the president and that threat.” Rep. Mike Coffman of Colorado said the attitude shift was a "stunning change ... It was a 180-degree difference."
The sign that Republicans are looking to hold the line on the Keystone provision could put President Obama in a difficult position. As Politico's Darren Goode reports, a number of Democrats actually support the project.
To some House Democrats, getting approval for the $7 billion, 1,700-mile pipeline from Alberta oil sands to Texas refineries is a serious effort that should hitch a ride in a must-pass payroll tax cut extension.
Rep. Mike Ross of Arkansas — one of 47 Democrats that supported a House bill this summer to require a decision on the pipeline project by Nov. 1 — counted more than 20 Democrats who would likely support adding the Keystone language to the payroll tax package.
All political strategizing aside, NPR decided to take Republicans up on their claim that the millionaire surtax would prevent wealthy job creators from hiring new workers by seeking out small business owners who said they'd slow hiring if the measure passed. The evidence they found was less than satisfactory. "We wanted to talk to business owners who would be affected. So, NPR requested help from numerous Republican congressional offices, including House and Senate leadership. They were unable to produce a single millionaire job creator for us to interview," reads the report by Tamara Keith. "So we went to the business groups that have been lobbying against the surtax. Again, three days after putting in a request, none of them was able to find someone for us to talk to." They did manage to find Ian Yankwitt, owner of Tortoise Investment Management in New York. "It's not in the top 20 things that we think about when we're making a business hire," he said.