Nel's New Day

December 19, 2011

House Republicans Drop the Ball on Middle America

The payroll tax cut looked like a done deal last Saturday after the Senate passed a two-month extension with a 89-10 vote. All 39 Republicans voted in favor, and Speaker of the House John Boehner (R-OH) said that the House would also vote in favor.

The good news about the Senate bill:

An extension of the payroll tax cut for 160 million working Americans

An extension of federally-funded, long-term unemployment benefits for 1.8 million Americans in just January

Prevention of a 27 percent cut in Medicare reimbursements for doctors

The bad news about the Senate bill: Republicans forced a provision to make the president to make a decision on the Keystone XL tar sands pipeline within 60 days. (More about that later.)

Because Republicans insisted that the continuation of the tax cut be paid for from other funds while refusing to accept a 1.9 percent surtax on millionaires, the bill included an increase in Fannie Mae and Freddie Mac fees which would cover just two months. For the other ten months the Republicans wanted to take money from the middle class to pay the middle tax so the Senate delayed this discussion. The bill passed, both sides in the Senate agreed to hammer out a solution in another two months, and the Senate adjourned for the year.

After Boehner said yes, he said no. Although a minority of House Republicans was willing to support the bill, Boehner didn’t want to make the others look bad by voting against the bill. He also wants to kill the economy so that President Obama will look bad. After saying that the House would vote down the Senate bill—which Minority Leader Mitch McConnell loved—he even refused to put the bill up to the House for a vote

Without the payroll tax extension, here’s what happens to the economy:

Reduce GDP growth by 0.5 percent and cost the economy 400,000 jobs (Macroeconomic Advisers)

Knock off 1.5 percent off of first quarter growth next year (Barclay)

Extending the payroll tax extension the economy would continue to improve:

Add between 750,000 to 1 million jobs (Ameriprise Financial Services)

Add 1 percent to economic growth and create 1 million jobs next year (Susan Wachter, finance professor at the University of Pennsylvania’s Wharton School)

Put $120 billion into U.S. households in 2012 (Regional Economic Models)

Many of the Republicans realize how disastrous it is to not renew the payroll tax cut. Sen. Scott Brown (R-MA), facing a bruising campaign with popular Elizabeth Warren, said, “The House Republicans’ plan to scuttle the deal to help middle-class families is irresponsible and wrong.”

Back to the Keystone XL pipeline proposal that could ship oil tar sands crude, the dirtiest oil on the planet with mixed oil and sand, from Canada to the Gulf of  Mexico. To get a usable form of crude, the  industrial processes use massive amounts of water and energy with a total greenhouse gas footprint some 5% to 30% greater than processing conventional oil. The oil sands are often mined in huge pits requiring huge swaths of forest to be cut down and nearby waterways to be polluted. All thanks to Exxon Mobil, Royal Dutch Shell, and BP.

Approval at this time, as the bill demands, would pre-approve the safety of an unknown route with the known quantity that Nebraska will avoid the precious Ogallala Aquifer. The 1,700-mile pipeline will threaten more than 1,500 waterway crossings with the type of accident that dumped 42,000 gallons of oil in the Yellowstone River last summer and put 20 times that much tar sands in Michigan’s Kalamazoo River in 2010. That spill hasn’t been cleaned up yet.

With the Keystone XL pipeline, Congressional Republicans have promised hundreds of thousands of jobs and oil that will make the United States more independent of the Middle East. Independent studies show a maximum of 6,500 temporary construction jobs, few of which would be local hires. Cornell University concludes that the pipeline would kill more jobs than it would create by reducing investment in the clean energy economy. The pipeline would lead to higher fuel prices in the Midwest, the study said, and that would slow consumer spending and cost jobs. It also said jobs could be lost due to crop failures or other events associated with higher pollution levels the oil sands would bring.

With the majority of the contracts for the processed oil already cut, most of it will probably be exported to foreign countries.

Both Republicans and Democrats want to know why Boehner called the compromise a “good deal” and a “victory” on Saturday, only to say he opposed the deal on Sunday? As recently as Friday, the Speaker said he’d demand an expedited decision on the Keystone XL pipeline as a condition for the payroll break. Democrats agreed to meet the demand, and Boehner still won’t take the Senate bill to the House. And my last question. Are the 160 million Americans who are losing money watching the Republicans?

1 Comment »

  1. Thanks for the article, it was interesting and compelling. I found my way here through Google, I will come back another time 🙂


    Comment by Shera Maute — February 7, 2012 @ 7:08 AM | Reply

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