Now that the payroll tax holiday has passed and will remain in effect through the end of 2012, the question remains as to what happens next year.

President Obama and the Democrats have promoted the tax holiday as a middle class tax cut benefiting the average worker to the tune of $1,000 per year or roughly a $20 a week boost to workers  paychecks.   Since that tax holiday went in to effect in 2010 the real effect is that workers won’t see that $20 a week benefit disappear this year.  Next year however could be a different question.

When the talk of an extension came up late last year, Republicans demanded that there should be spending cuts to offset the drain on the Treasury and more specifically the Social Security Trust Fund so that the tax holiday wouldn’t cost the government any more money than it already had in terms of increasing the deficit.

The president along with the Democrats in the House and some help from the mainstream media portrayed the GOP as cold-hearted and not wanting to give middle income Americans a much needed tax cut. Plus it was only temporary.

This was a very effective strategy, as Congress passed a two-month extension so they could go home for Christmas and in essence punted the ball into 2012.  When the time came to deal with the “tax cut”,  Republicans seemed to have lost their resolve and passed an extension without demanding that it be paid for somewhere else in the budget.

Score this as a victory for Obama, but a loss for taxpayers and their future generations who will eventually have to foot the bill for this folly.

For the Democrats it was all part of a strategy of pulling together a populist message that was also a pocketbook issue in an election year.  Who cares about paying the Piper when you have an election to win? Certainly not House Minority Leader Nancy Pelosi, who told PBS Newshour’s Judy Woodruff that she wasn’t worried about how the reduced payroll contributions will be repaid by saying “I think that this should be the last year for it. One or two years, no, the trust fund can handle that.”

What’s $70 billion in lost revenue when you have a national debt of over $15 trillion?

The bigger problem with the “tax cut” as Obama prefers to refer to it is how do they revert to the old rate once the extension expires without calling it a tax increase as the president accused Republicans who were against the extension of favoring.  Oh yeah I forgot.  It will be after the election which Obama hopes will result in a second term and by that point he will find another way to rephrase it so that he doesn’t look like the bad guy.

In the end this supposed “tax cut” will do little to stimulate the economy as most workers have either been saving the extra money in their paycheck or spending it on gas which is soaring towards record highs instead of making purchases of items that help create new jobs.

Even Treasury Secretary Tim Geithner admits that one result will be that we will have to increase our debt ceiling limit ahead of schedule which should give voters a clue of the bum hand that they have been dealt by Obama and the Democrats.

Tick, Tick, Tick goes the debt bomb.

 

 

 

 

House Minority Leader faced a barrage of criticism from constituents yesterday at a town hall in Oakland, California over her vote on the debt ceiling deal.

As Pelosi spoke the crowd called her a sell out and questioned why she voted for a deal that she admitted she “did not like at all” with one constituent labeling it a “Satan sandwich.”

While the anger hasn’t risen to the level of two years ago when Obama’s health care proposal stoked anger across the country, it must be disquieting for Pelosi to see that not even her liberal constituents are buying the Democrats line that it’s all the Republicans fault.

http://videos.mediaite.com/embed/player/?layout=&playlist_cid=&media_type=video&content=2FKN4C0JD2T09SMJ&read_more=1&widget_type_cid=svp

In another one of those classic moments in Congress Democrats Sheila Jackson Lee and Nancy Pelosi both agreed that President Obama was singled out by the GOP during the recent debt ceiling debate because he is black.

This is just another smokescreen since what really angers them is that Obama didn’t hold firm to the Democrats position and let the GOP get the best of him on the debt ceiling debate.

In an interview with the liberal Think Progress, House Minority Leader (Has a nice ring to it doesn’t it?) Nancy Pelosi said that the debt ceiling fight wasn’t about deficit reduction but really a desire by the GOP to destroy the public space.

We just passed a bill, $1.2 trillion in cuts. If it were about reducing the deficit, the statement has been made about seriousness to do that.  This isn’t about that.  It’s about destroying, it isn’t about reducing the deficit.  It’s about destroying the public space. It’s about destroying federal involvement in public education. It’s about clean air, clean water, food safety, public safety, you name it they’re there to diminish it. Destroy it.

All Republicans and in particular Tea Party members wanted was for the government to behave in a fiscally responsible manner and to rein in the spending that has saddles us with $14.3 in debt and thanks to the debt deal will allow it to grow up to $16.7 trillion.  That isn’t destroying the public space or government it’s only encouraging them to do business as usual and kick the can down the road.

Spending cuts can be tough but our government has grown into a monolithic force that has found its way into almost every facet of our private lives and it needs to end now.

The economy will not grow if the the government continues to regulate businesses out of existence but that seems to be lost on Pelosi and her colleagues.  Try creating jobs when there are no businesses to hire them.

If the current members of Congress aren’t willing to stand up and fight to save this country from economic disaster then it’s time to clean house once again and find someone who will.

House Minority Leader Nancy Pelosi stood squarely on President Obama’s side on Wednesday when she told the press that the president had listened over and over to the Republicans on the debt ceiling and that he knows the facts and nobody can out debate him.

Is she talking about the same president who said this the other day?:

“If we think it’s hard now, imagine how these guys are going to be thinking six months from now in the middle of election season, when they’re all up.  It’s not going to get easier, it’s going to get harder. So we might as well do it now; pull off the Band-Aid, eat our peas.”

Sounds a lot like when my parents used to tell me to eat my vegetables when I was a child.  That’s very presidential.

As for Pelosi’s statement that Obama listened to the GOP. He listened all right,  until the point he didn’t like what was being said and then walked out on negotiations.

Waaaah!