IN SIMPLE TERMS
A year ago, after Republicans won a sweeping majority in the November elections, Nancy Pelosi, Harry Reid, and the Democrats who still held the purse strings, pushed through H.R. 4853 aka The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 and deemed the payroll tax holiday, which reduced the amount of contributions to Social Security insurance by two percent% for most workers for one year and expire on December 31, 2011.
The reasoning was that workers would have more money to spend and that would benefit the economy, and got a lot of positive press for the Obama administration. The reality is over $100 billion less was paid into the Social Security fund at a time when everyone was hollering about Social Security going broke.
Most workers seemed to not hear the “temporary” part of the deal, and the part that when they file their taxes for the 2011 year they will lose the Making Work Pay tax credit, but with Republicans now holding the purse strings they will be blamed. Workers have gotten used to having those few extra dollars in their paychecks.
For most of the year negotiations have been underway on Capitol Hill on whether to allow the “tax cut” to expire as was originally planned, or extend it and if it is extended, how to replace that money in the budget.
Article 1 Section 7 of the Constitution of the United States states “All bills for raising revenue shall originate in the House of Representatives but the Senate may propose or concur with amendments as on other bills”.
The Republican House of Representatives offered a bill to extend the “holiday” for one year and pay for it with revenue that would be created by building the Keystone XL pipeline, which would create 20,000 new jobs along with spin off jobs and more taxpayers.
You will recall the job creating President warning congress to not attempt to tie Keystone to the payroll tax holiday extension. You see, even though Unions are strongly in favor of this project, the environmentalists and EPA is opposed to it. (You might want to investigate the ties of the EPA to Agenda 21). Little press was given to the Republican plan.
The Democrat led Senate totally rejected the House plan and offered their own eliminating the Keystone language, extending the holiday for only two months (which makes no sense) and to pay for that two-month extension a fee will be added to new mortgages and refinanced mortgages for the next TEN YEARS.
The Senate bill also extends unemployment benefits, again.
In conference part of the Keystone language was put back in. Republicans caved and agreed to the two-month extension, the President signed it into law and everyone went off on their Christmas vacations. It will be taken up again next year when everyone comes back to work.
Hopefully the Democrats will have found some common sense in their stockings on Christmas morning and the voters who sent them there some sense of fairness and personal responsibility, and Republicans will return to Capitol Hill with a backbone.