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Priorities: Will Senate Republicans Kill Another Lifeline for the Economy?

This week, yet another portion of President Obama’s American Jobs Act is coming up for a vote in the U.S. Senate. This provision would extend a payroll tax holiday that saves working people about 2% of their income.

Instituted in late 2010, the payroll tax holiday has helped keep consumer spending afloat during a sputtering economy.

The extension of the payroll tax holiday would affect nearly everyone who gets a paycheck, and it would be worth around $1,000 a year to the median household. That’s real money, and if it lapses at the end of the year as it’s set to, tens of millions of households would see a hit to their after-tax incomes.

Naturally, the Senate Republicans who have killed multiple provisions of the jobs bill are preparing to do this one in, too. At the head of the line to oppose the payroll tax holiday is Arizona’s Sen. Jon Kyl, a member of the Senate Republican leadership and a partisan operator even by Washington D.C. standards.

As Steve Benen notes, Kyl has been loud and angry in his claims to oppose tax increases of any kind—but he’s also declared his disinterest in extending the payroll tax holiday, which would amount to a tax hike for the majority of households. See, the extension of the payroll tax holiday would be paid for, in the current bill, by a small surcharge on income over $1 million. Kyl says this is unacceptable.

Unsurprisingly, Kyl has it backwards. In a report on President Obama’s original jobs bill, the think tank Demos noted that “a payroll tax cut is highly effective at stimulating growth because it increases the size of ordinary people’s paychecks and most of this money gets immediately spent.”

Kyl is retiring at the end of his term next year, so he doesn’t have to face voters again. He can afford to take this economically illiterate and unpopular stance. Maybe it’s “not intended to be a factual statement,” which would be par for the course for Kyl.

We can debate whether Kyl’s stance here is more about ideology, rewarding campaign contributors or gaining political advantage by denying President Obama an economy-boosting policy win. (Given Kyl’s record, all three probably come into play.) In the end, though, it doesn’t matter what his motivation is, since the net effect is the same. If he gets his way, working families will have less money in their pockets next year.

As I’m always fond of saying, politics is about priorities. Here’s a clear-cut choice: ask for a short-term sacrifice from millionaires, and give some relief to tens of millions of working families, or keep taxes on the wealthiest at their historic lows and watch as taxes go up on nearly every working family. Kyl has made his choice.

Tags: Jobs, Senate, unemployment, unemployment extension