Once again, lawmakers in Washington, D.C., are working on a deal to extend a payroll tax cut for 160 million Americans beyond the end of the month.
And once again, debate has ensued.
Members of both parties agree the tax cut should be renewed for a full year, and its extension has been seen as a foregone conclusion. But Democrats and Republicans alike are divided over how to pay for it. Toss in the fact that it’s an election year, and it’s pretty clear that discussions will be long and drawn out before a final decision is made.
If the payroll tax is not extended, it will revert to 6.2 percent from 4.2 percent and leave workers with an average of about $1,000 less in their wallets this year.
Some argue that failing to extend the cut to the payroll tax, which funds the federal Social Security retirement program, beyond its current Feb. 29 expiration date would cause harm to a slowly-but-surely recovering economy. Others say the tax is a literal drain on already-drained Social Security funds.
Moody’s Analytics chief economist Mark Zandi told the congressional Joint Economic Committee earlier this week that not extending the payroll tax cut “would deliver a significant blow to the still-tentative economy.”
If it sounds like a familiar debate, that’s because it is. Lawmakers spent the better part of December going back and forth on whether the tax should be extended beyond its initial expiration date of Dec. 31, 2011. At that time, they settled for a two-month extension and decided to address the issue again this month.
Even then, it was met with mixed reviews.
“While so many West Virginians and I would have preferred a long-term deal that would protect the future solvency of Social Security, (December’s) announcement of a short-term extension does not change our responsibility to do what is right,” U.S. Sen. Joe Manchin, D-W.Va., said following the two-month extension in December.
“For the sake of Social Security, we must find a responsible long-term compromise that does not sacrifice our seniors or ignore the need for meaningful tax reform to address our exploding debt.”
The Mountain State’s other senator, Jay Rockefeller, also a Democrat, issued his own statement following December’s vote.
“What a huge relief — Republican leaders in the House have come to their senses just in time to make sure working West Virginians don’t get hit with a tax increase (in the beginning of 2012). This plan lets every working person keep more of their own paychecks right away, so they can pay their bills, buy groceries or just know there’s a little more money in their wallet when they need it.”
So what’s the solution?
America is tired of political games. Congress must put politics aside and focus instead on what really needs to come out of these discussions and debates: a long-term compromise that will keep the economy on the road to recovery. Extending the payroll tax cut for the remainder of the year will help keep the economy on the upswing.
After all, the economy is in a recovery stage. Wages are beginning to bounce back. And with 10 months left to plan, families can prioritize their budgets to weather the 2 percent cut at the beginning of 2013.
It’s time to “do what is right.”