Guest Host: Susan Page
As the year is rapidly coming to an end, congress has a long list of things to do. Among other things, lawmakers are debating the payroll tax cut, unemployment benefits for the long-term jobless, patching the alternative minimum tax, preventing cuts in medicare patients to doctors and a new proposal to end earmarks. A number of tax provisions are set to expire on December 31st. While congressional gridlock has been an issue all year long, there may be more motivation to get things done as some lawmakers say they want to be out of Washington, DC, by December 16th. A look at what’s ahead for congress as the year wraps up.
- Humberto Sanchez Staff reporter at Roll Call
- Janet Hook Congressional correspondent, The Wall Street Journal.
- David Welna Congressional correspondent, NPR.
MS. SUSAN PAGEThanks for joining us. I'm Susan Page of USA Today, sitting in for Diane Rehm. It's Dec. 1, and lawmakers have a list of things to finish as the year comes to an end. But with all the gridlock that has defined Congress lately, is there enough will to get things done before the holidays? Joining me in the studio to discuss the year-end crunch and what it could it mean to you are three reporters who cover Congress: David Welna of NPR, Janet Hook of The Wall Street Journal and Humberto Sanchez of Roll Call. Welcome to "The Diane Rehm Show."
MR. HUMBERTO SANCHEZThank you. Nice to be here.
MS. JANET HOOKThanks, Susan.
PAGEWe're going to invite our listeners to join our conversation later in this hour. You can call our toll-free number, 1-800-433-8850. Send us an email at email@example.com, or find us on Facebook or Twitter. Janet Hook, you've covered Congress for a long time. How many years have you been up there?
HOOKOh, off and on for about 20.
PAGEAnd is this different than usual that we have this crush of very critical legislation to do in the final two weeks they plan to be in town?
HOOKNot different at all. This is kind of the way Congress always works. They're kind of like college students who wait until their -- the night before the paper is due to finish it. This year, though, what's been different is Congress has had a lot of deadlines across the course of the year, and they've actually been really, like, catastrophic deadlines that -- in the middle of the year, they had to pass a spending bill or else the whole government would shut down.
HOOKIn the summer, they had to pass some kind of increase in the debt limit or else the country would go into default. And by contrast, this is kind of the deadline of -- they want to go home for Christmas. They do have to pass a spending bill by Dec. 16. They could probably postpone that deadline by passing a short-term bill, but this really is -- especially, when you have a divided government and the parties at odds, as much as the Republicans and Democrats are now, deadlines are really the kind of action forcing event in a big kind of institution like Congress.
PAGESo, Humberto, one of the things on the agenda is the extension of this payroll tax cut, something that would affect every American who has a job. What's -- where does that stand now?
SANCHEZWell, there are two competing proposals now. The Senate Democrats want to -- have embraced the president's plan to reduce the payroll tax to 3.1 percent, I believe, and also cut it in half for our workers as well. It's typically 6.2 percent. They want to pay for that with a millionaire's tax, which Republicans find objectionable. And Republicans have offered their own plan, which would extend the current cut, which cuts the payroll tax from 6.2 percent to 4.2 percent.
SANCHEZAnd they want to pay with -- they want to pay for that with extending a federal pay freeze, also cutting the pay -- federal pay -- the federal workforce by 10 percent and a few other things that they believe will -- are more acceptable and less onerous to the economy, like they think the -- millionaire's tax would be.
PAGESo if you're wondering, listeners, what this might mean to you, if you make $40,000 a year, this -- what's at stake for you is about $800 next year, whether this payroll tax cut gets extended. So, David Welna, it sounds like Republicans and Democrats agree they want to extend it, but they disagree about how to pay for it.
MR. DAVID WELNARight. Republicans initially pushed back on the idea of extending this for another year. But then Democrats started saying, well, what -- are you Republicans, saying that you want to raise people's taxes? And, you know, that's anathema to most Republicans. Many of them have signed Grover Norquist's pledge, and they started backtracking on it and saying, oh, well, actually, we think it should be extended, too. However, we think it should be paid for.
MR. DAVID WELNALast year, when they put this payroll tax holiday into effect for just one year, it was not offset by any kind of spending cuts or increased revenues. This year, it's a different mood on the Hill. Everything has to be paid for. And the big fight right now is how is it going to be paid for, not whether it's going to be paid for.
PAGEAnd does this idea of the tax -- millionaire's tax, which Democrats have talked about in -- for various scenarios this year, does it have a shot?
WELNAWell, I think there is a lot more awareness right now about growing income inequality and about how those on the top have benefited handsomely over the past few decades. Seeing their incomes go up tremendously and at the same time have benefited from the George W. Bush era tax cuts, the proposal is to have 3.25 percent surtax on income above a million dollars. This would affect maybe 300,000 taxpayers or so. Republicans say that is taxing small business because many small businesses filed their tax returns as personal income.
WELNAAnd there are some Republicans talking about making some kind of an exception for those businesses so that they could go ahead and approve this and not be accused of taxing small business. But I think they're a tiny minority. Some kind of a deal has yet to come out that both sides could agree on.
PAGEWe did hear President Obama yesterday out in Pennsylvania, really hammering the Republicans for the idea that this tax -- this payroll tax cut would not be extended. Is it a good issue for Democrats, do you think, Janet?
HOOKWell, they certainly think it is. And it does put the Republicans on the defensive, in part, because, like David was saying, their opposition to -- or their signs that they weren't going to go forward on extending the payroll tax ran totally counter to their claim to be opposed to any kind of tax increase. They've been fighting through the year and through the debate at the super committee against raising taxes on the wealthy. And so this really puts them in a tight spot.
HOOKAnd, in fact, I think one piece of the Republican alternative shows the way in which they feel a little stung by all this complaint that they're just friends of millionaires. Instead of having a tax increase on millionaires, they're proposing raising the Medicare premiums on millionaires and billionaires and also prohibiting millionaires and billionaires from getting unemployment compensation and food stamps.
HOOKNow, I don't think that is going to save a lot of money because there aren't many people who do. But, anyway, so it just shows that, rhetorically, they do feel like they've got to bend off this claim that they are the friends of millionaires and billionaires.
WELNAI think there's also a suggestion that those millionaires or billionaires who feel that they're paying through taxes can voluntarily send more taxes to the IRS. But it's a little bit hard to score how many more dollars would come in from that.
PAGEHow much we'll save by prohibiting millionaires and billionaires from getting food stamps would be an interesting number to hear. What we hear -- Obama, of course, is hammering Congress, the do-nothing Congress, on this issue and on some other issues. Humberto, does he and his White House play a role in trying to get these measures through on the Hill? Are they a player there?
SANCHEZAbsolutely. He is really taking the case to the American people in -- like he did in Pennsylvania, trying to essentially paint Republicans as opposed to a tax cut. And they -- it's been effective because now they have come around to say -- because, initially, they've been reluctant to support extending the tax cut, but they left the door open. And now they fully said, we are behind extending this payroll tax cut, but we oppose to pay for it.
PAGEBut compared to previous administrations in previous presidents, does this White House play the same active role, David, do you think, in terms of getting legislation through, or is it more, rhetorically, from beyond those walls?
WELNAWell, I think that we saw last summer a very active White House in the push to raise the debt ceiling. That seemed to be a crucial issue for them to make happen. But I think that there was kind of a pulling back after that, and we saw in the several months that the super committee existed, that there was kind of a hands-off approach, at least in public by the White House, for any kind of suggestions for making the other. In September, the president made some suggestions for how they could reduce deficits.
WELNABut I think that what we're seeing right now from the president is a much more assertive, proactive stance in pushing an agenda that contrasts Democrats. He cast Democrats as being on the side of the middle class and of the unemployed and so on and contrasts that with Republicans who oppose his proposals, especially his jobs proposal, as being on the side of the rich and essentially, implicitly saying that they are against these other people, the unemployed and the middle class.
PAGEBut we saw a lot of unemployed Americans up on the Hill yesterday for big press conference that Democratic congressional leaders held. One of the issues is extending these long-term unemployment benefits. If it gets a one-month delay -- the New York Times reported this morning a one-month delay in extending these long-term, jobless benefits would cut off 1.8 million unemployed workers in January alone, so a big impact for a lot of Americans. Janet, where does this issue stand? Is it going to get passed in time?
HOOKWell, this is one of the list of issues that you started out mentioning of things that expire at the end of the year, and the thought is that all of these issues will probably be addressed in one big bill. The unemployment insurance expiration has really been overshadowed by the debate over the payroll tax. I do think that it probably will be expended. I've actually found it kind of interesting.
HOOKIn being overshadowed, I was -- in the past, the last extension of the unemployment benefits about a year ago, there was a little bit more push back, mostly from Republicans, but even from some Democrats, of people saying, you know, we keep extending these emergency benefits. Maybe it's encouraging people to not look for jobs. Well, that argument really doesn't hold up very well at a time like this one. Unemployment has been persistently so high.
HOOKSo I think you see a lot less skepticism about whether to extend the benefits. So the Republicans are looking for possibly what they call reforms to the program, which might sort of make it harder to get benefits. I don't know what they have in mind. It may be that there'll be some strings attached, maybe that they'll reduce the number of weeks you qualify. But I'm pretty confident that they're going to extend these benefits.
PAGEWhat we found not only is unemployment high, 9 percent, but the issue of the long-term unemployed has become really difficult. And a lot of Americans who are out of work find it harder and harder to get a job the longer that you're out of work. Do we think this will have an impact on the economy, both these issues, Humberto, extending the payroll tax cut, extending long-term jobless benefits?
SANCHEZAbsolutely. A lot of economists believe that if unemployment benefits and the payroll tax cut are not extended, it could be about .75 percent cut in the GDP. And, also, unemployment insurance is a really efficient way for -- to stimulate the economy because people are more likely to dispend those funds then otherwise. And so it's -- they definitely have a big impact on the economy.
WELNAYou know, I think that there's a fundamental divide between Democrats and Republicans on how to make economic recovery happen faster. And Republicans want to offset any measures that are taken. Democrats don't think that's necessary because they say that's what stimulates the economy.
PAGEWe're going to take a short break. When we come back, we'll talk more about what Congress has ahead, and we'll take your calls. Stay with us.
PAGEWelcome back. I'm Susan Page of USA Today, sitting for Diane Rehm. With me in the studio: Humberto Sanchez, a staff reporter at Roll Call, Janet Hook, congressional correspondent for The Wall Street Journal, and David Welna. He's a congressional correspondent for National Public Radio. Well, we've had a series of threats of government shutdowns. We're going to face another one. Janet, what does Congress need to do to avoid shutting down? I guess Dec. 16 is when funding for the government expires once again.
HOOKThat's right. And there's several appropriations bills that haven't been cleared -- some have -- for the full year. And so Congress has to figure out either how to pass individual bills by the 16th or to package them together. And the packaging approach is far more likely. The House and Senate Republicans and Democrats are actually behind the scenes, negotiating their differences. And there's a lot of them. I think the negotiations are made easier on the money front because they've already decided on the overall spending target for the year.
HOOKThe more controversial part is the policy writers. Republicans have included in their bills a lot of conservative amendments that say, you know, the EPA can't regulate this, the EPA regulate that, anti-abortion language, things like that that Democrats don't like and they don't think are appropriate to be included in appropriations bills.
PAGEI wonder if there's a little bit of a crying wolf phenomenon here, Humberto, that Americans have so often heard they're on the brink of running out of money, it's possible for a government shutdown, all these negotiations, that they think, well, I've heard this story before.
SANCHEZI'm sure that the American people are quite tired of this tale. But it does run out on the Dec. 16, and they will have to act. One interesting point about that is that the deal they made to raise the debt ceiling, cap spending at $1 trillion, $43 billion. The deal also includes some disaster funding for FEMA, and it's about $11.3 billion. Unfortunately, if they spend all that money, they will have spent more money this next fiscal year than in the previous fiscal year, and that is not good for conservatives.
SANCHEZConservatives are very concerned about having to go home and say that they spent more this year than they did last year. The leadership right now is telling their rank and file members the trajectory on the whole for spending is on its downward and that they can be confident that they've made a difference. But this is going to be a problem going forward to pass this bill.
PAGEWell, especially for these Tea Party Republicans who are elected with a promise to do whatever it took to get spending down.
WELNARight. Because I think that the deal that they reached back in the spring to keep the government operating through September of this year cut only $7 billion in the end from spending. And after all of the drama around that -- I mean, I think that you, again, have this conflict of, what is the role of the government at a time of economic weakness? And Democrats say, actually, the government should be spending money. Interest rates are near zero right now. There's a huge appetite for some kind of infrastructure program out there. Polls show this, at least.
WELNABut Republicans are holding the line on the spending issue saying, we can't spend more -- and I think it is a lot of concern about next year -- and people saying, what about this promise that you were going to bring down spending? At the same time, you see that the Tea Party support, and even Republican districts' polls this week, showed -- is weakening. So, you know, the fact that you're seeing some senators this week suggesting that maybe the payroll holiday could be offset with some revenue increases may reflect that they're being emboldened to take more independent stance from the Tea Party.
SANCHEZThere's also a strong case to spend that $11.3 billion, which would take them above because the government operated on CRs this year, on continuing resolutions. They weren't allowed to address this -- the needs for all the disasters that took place this year, like Hurricane Irene and so forth. And so there's a compelling argument to spend this money, though it looks terrible for Republicans if they do.
HOOKAnd I think, actually, any conservative who thinks that they haven't won the overall argument on fiscal issues is -- like, is missing an opportunity to pat themselves on the back. I mean, this Congress has -- the whole atmosphere about spending has changed dramatically from the beginning and the end. The idea that we're even considering offsetting cuts on a payroll tax, extension in unemployment insurance, I mean, those are the kinds of measures that economists, for a long time, have thought, you know, don't need to be offset.
HOOKAnd the fact that everything is -- has to paid for -- I mean, the whole frame of debate -- even if the numbers show that we're spending marginally more, the whole framework of debate has changed for better or worse.
PAGEWhat we saw earlier in the year, when House Speaker John Boehner tried to negotiate a big deal with The White House on spending, that his Tea Party forces really pulled him back, didn't let him do that. Are they -- can they still do that? I mean, is -- do you think, Janet, that the congressional leadership is still very concerned, especially in the House, about making sure they keep those Tea Party forces within their camp?
HOOKI don't know. My sense is the way they look at their party right now, is it's not so much that they're trying to appease them. I think it's like a head counting problem. I mean, they just have to -- they've lost 40 to 50 Republicans on every key vote on spending. And I think they've just figured out that that's the way they need to pass bills.
PAGEAnd they're losing these votes, not because they're voting with Democrats, not because they want to spend more, but because they want to spend less.
HOOKRight, right. And so it's just -- it's kind of a -- it's a coalition that they're learning how to manage. I sense a little bit less fear about it. I think they kind of know where those people are coming from now.
SANCHEZOne trade-off they could've done was with the writers, putting policy writers in an effort to try to bargain down the overall spending level. But because the last package of bills, they passed the package of three spending bills before Thanksgiving. But Democrats provided the majority of those votes, and now they have a weaker hand in terms of trying to negotiate on this.
WELNAAnd another thing that's going on is that we've heard a lot from the fiscal hawks over the past year. But the military hawks are all up in arms now about mandatory spending cuts that are coming up because the super committee failed to come up with its own revenue deficit reduction plan. Those cuts that would start happening in January of 2013 are on track to go ahead, and a lot of Republicans are scrambling to find some way to stop that from happening.
WELNASo, in a sense, they've got a kind of a contradiction in their rhetoric in that they're defending defense spending at the same time that the overall message is we have to cut spending.
PAGEDefinitely a debate for next year, although President Obama has said several times flatly he will veto any effort to modify that process that's called sequestration that would affect defense spending so hard. I mean, I wonder, Janet, to what degree Congress, just generally, is having to deal with the failure of the super committee. Some of these measures were supposed to be dealt with as part of their kind of master plan.
HOOKYeah, that's exactly right. I think people weren't thinking about these separate issues, payroll tax, unemployment and others -- other year-end problems until after the super committee failed because they just thought one big package could take care of it all.
PAGEMeanwhile, we had a press conference yesterday, bipartisan press conference. We don't see that so often on the Hill these days, calling for an end to earmarks. Now, Humberto, I thought that there was already a moratorium on earmarks?
SANCHEZThere currently is a moratorium made. It runs through the end of next year. And -- but earmarks, there are several powerful forces in Congress that want to continue the earmarking process. In particular, Senate Majority Leader Harry Reid says that earmarks are important and they're a constitutional right to lawmakers. And he's backed up by Senate Appropriations Chairman Daniel Inouye, who's said that he intends to go back to earmarking as soon as this moratorium is over.
PAGEAmazing that the appropriations chairman would be in favor of earmarks.
PAGEI mean, I guess, the argument from Congress' side, the constitutional argument is it's the way that Congress can cut into the power of the executive on spending money. Is that right, David?
WELNAWell, Congress has the constitutional mandate to determine spending. And, you know, they hold the purse strings, and they say, you know, we are -- our Founding Fathers wanted us to make these decisions and not leave the decisions to the executive branch.
WELNAAnd, you know, you see Republicans, as well as Democrats, kind of (word?) the fact that they locked themselves in for two years not to have any earmarks because, as they approach next year's elections and they go back to their constituents empty handed saying, I don't have anything to show for the District, in particular, you're going to see more pressure, I think, to make some exceptions to the no earmarks ban.
PAGEAnd yet earmarks have become a real symbol of wasteful spending, parochial spending, inappropriate spending, rewarding contributors -- that's why it's become such a hot issue, right, Janet?
HOOKRight. Even though it's -- as a dollar amount, it's a very small amount of money, I think it's just mostly seen as a symbol of the kind of horse trading that people don't like in Congress. However, there is an argument that some on the Hill make that the absence of earmarks makes it harder to pass these bills, that the reason why they could pull some more people on, onto a big, you know, $10 billion bill is that they had, you know, $100,000 for a local project in there.
PAGELet's go to the phones and let some of our listeners join our conversation. Sue is calling us from Indianapolis. Hi, Sue.
SUEHi. Thanks for having me on your show.
PAGESure. Go ahead.
SUEHello. Oh, I have a question about the payroll tax holiday. This is actually FICA, which goes to Social Security. And if you extend the holiday, that's taking money away from Social Security fund. And if you offset it with a millionaire tax, will that tax money go to Social Security, or will that go to the general fund? I'm afraid that we're hurting Social Security for longer -- for younger people in the long run. And I have Social Security now, but I'm very concerned that younger people also get it. So that's my question.
PAGESue, that's just a great question. Who on our panel could answer it?
HOOKAs it happens, it's something that a lot of people are concerned about. In fact, I think the way the bill is written, the money will be repaid to Social Security by the general fund so that it basically -- it adds to the deficit rather than undercutting Social Security.
PAGEYou know, one of the issues that Congress is also considering is called the doctor's fix. Humberto, can you explain to us what that is?
SANCHEZPhysicians that participate in the Medicaid program -- or, I'm sorry, Medicare program, they get payments back from the federal government that are subsidized. And they're set to get, I think, around a 30 percent cut if Congress doesn't act by the end of the year in these payments. And if they were -- if they do get cut, they're less likely to participate in a Medicare program.
PAGEBoy, a 30 percent cut, that's a pretty serious measure, David.
WELNAYeah. It's 30 percent just because, every year, they've been kicking the can down the road. And they realized some years back that they had sort of overestimated on their payments to Medicare providers, and so there was this resolution to gradually cut back. That got put into law, and Congress has been unwilling to vote that out of law. So, every year, they're faced with this prospect of having massive cuts and problems that Medicare providers might not see new patients if those cuts actually went through.
PAGEI'm Susan Page, and you're listening to "The Diane Rehm Show." We're taking your calls, 1-800-433-8850. Well, those are two powerful lobbies, right? Doctors and seniors. So, Janet, is it -- do you think it's likely that this doctor fix gets made by the end of the year?
HOOKYes, I do. I think this is as powerful a deadline as the expiration of the payroll tax. I mean, this is something that nobody really wants to happen. And, again, it comes down to the question not of whether Republicans and Democrats want to do this. They don't want this cut in Medicare fees to take effect. It's how they pay for it 'cause it can be very expensive, depending on how much -- how you structure it or how long you extend the fix to. It starts at $20 billion over 10 years.
PAGELet's go back to the phones. We'll go to Charlotte, N.C., and talk to Christie. Christie, thanks for holding on.
CHRISTIEYes. Hi. Thank you. So love the show and rely on it for important information as much as I can listen to it.
PAGEWell, that's great to hear.
CHRISTIEThe thing that comes to mind for me is, number one, it's not the, you know, Republican or Democratic states of America. It's united. We have to pass austerity measures, effect entitlements and have taxes. We can't look at Europe, which we contributed to that domino effect, and say, we're not going to do anything. I'm embarrassed the super committee has done nothing. And my feeling is, as states, we need to strangle our congressmen, the senators, women. Don't come home for the holiday if you didn't get your job done. I like Warren Buffett's idea. You don't pass the budget, you lose your job.
CHRISTIEYou're there to get something done. You're not there to get re-elected. And I'm embarrassed. I'm embarrassed at the leaders. I work very hard to turn North Carolina blue. I'm a progressive. And I'm embarrassed that these people will not make the tough decisions.
PAGEAll right, Christie. Thanks so much for your call. Janet, what do you think?
HOOKWell, I think Christie is part of the 91 percent of America that is really unhappy with Congress. Congress' approval rating has dropped to 9 percent in some polls. And John McCain has often said that 9 percent is comprised of family and paid staff. Many, many people are unhappy with Congress' performance, and so I'm not surprised that we hear from somebody like Christie. The super committee failure just kind of was another log on the fire of people's sense of fury that Congress hasn't been able to grapple with these problems.
PAGEChristie said that if Congress doesn't finish these things, they should just stay here and work instead of taking that Christmas holiday break. Humberto, do you think they'll make -- one of the leaders suggested yesterday Dec. 16, the date they want to get out. Are they likely -- given that they -- everybody wants to go home for Christmas, are they likely to make it?
SANCHEZThere could be -- in terms of the appropriations, that's a hard deadline. They could extend that. There could be a possibility where they get some grand bargain the day before Christmas Eve, something to that effect. It's entirely possible that they work past Dec. 16.
PAGEThat is not popular with reporters, I can tell you. They have a grand bargain on Christmas Eve. Dave Welna, does it affect Congress that its approval rating is so low? Do members of Congress worry that so many Americans are unhappy with the job they're doing?
WELNAWell, I asked a number of members of Congress from both the Senate and the House and from both parties what they thought of the 9 percent approval rating and whether it was merited by Congress, and every one of them agreed. And yet, for example, Jack Kingston, a Republican House member from Georgia, said, you know, his problem is he goes back to his district, and 1 percent comes up to him and says, you know, I want you to compromise. I want you to find common ground and get solutions.
WELNAAnd then the next person comes up and says, you know, stand on your principles. Don't compromise. Don't give in to the others. What do you do? And I think that's how a lot of members of Congress feel, but especially Republicans because they're worried about primary challenges from people to the right of them, possibly, and of not even making it to the general election.
PAGEWe have a -- on Facebook, Rick has posted a comment. He says, "I wonder how many current members of Congress will be voted out of office next November. When I was worried about my job, I did my best to impress my bosses, but I don't think that we the people are important anymore." Talking about things Congress worries about, to what degree are they worried about next year's elections, Janet?
HOOKWell, you know, one of the big questions about next year's election, as Rick was talking about people being voted out, I think that it's likely that incumbents of both parties have anxieties about the election. Unlike the last few elections that were clearly wave elections that favored one party over another, this is really a pox on both your houses kind of election year.
PAGEJanet Hook with the Wall Street Journal, and we're also joined by Humberto Sanchez of Roll Call and Dave Welna of NPR. We're going to take a short break. When we come back, we'll go back to the phones, and we'll also talk about the prospects that that alternative minimum tax will get patched before the year is out. Stay with us.
PAGEWe've gotten a lot of emails and comments on Facebook and Twitter along the lines of this comment from Jack, who writes us from Ohio. He says, "If the richest Americans are the job creators, then where are the jobs?" And here's another one. Dennis in North Carolina writing us, "If unemployment and jobs are the main issue, how does downsizing government and drastically cutting defense spending lower the unemployment number? As I see it, this will add tens of thousands to the unemployment roles."
PAGEIt is certainly true that in national polls, we see that the number one jobs for -- the number one issue on the minds of many Americans is jobs, the economy generally, the unemployment crisis for many Americans. Are any of these proposals that Congress is going to deal with over the next couple of weeks addressing that particular issue, Humberto?
SANCHEZThey -- they're marketed as such. But, I mean, the payroll tax, for example, is a kind of a way to help people who are down in their luck and also in an effort to boost the economy as well. President Obama had a jobs proposal in September that he unveiled, and the Senate Democrats tried to take pieces of it to do -- to pass it, one of which was an infrastructure financing proposal. Another one would have provided for -- to keep teachers and first responders on the job.
SANCHEZSo-- those all failed because of the -- they put the millionaire's tax as an offset for those things. But those were more geared towards creating jobs, if you ask me.
PAGEIt seems to me that the only proposals on the table really amount to extending current policy, so it's kind of a do-no-harm strategy, which is that it would be bad for the economy for the payroll tax to go back up and for unemployment benefits to fail. It is interesting how the rhetoric around the Hill has changed so that everything is now basically sold as a jobs program. The Senate Republicans had a press conference yesterday to introduce legislation, to force the Obama administration to okay the construction of this Keystone pipeline, the oil pipeline through the middle of America.
PAGEAnd the main reason wasn't energy independence. It was job creation. They said this is a shovel-ready, job-creating project. David Welna, we've gotten an email from Bruce, who complains, "You have been using..." -- not you personally but the whole panel. "You have been using the term payroll tax without explaining what it is." Explain to us what the payroll tax is.
WELNAThe payroll tax is actually both a tax to support the Social Security fund and also Medicare. And it is deducted from everybody's income from the very first dollar. But for Social Security, every dollar earned after $106,900 is not taxed at all for Social Security. But the Medicare tax continues after that. And one suggestion that's out there that Democrats are making is that that the cap be lifted so that there may not even be a cutoff for paying Social Security. It would be paid on all income that comes in.
WELNAAnd they say that would really shore up Social Security because the fact is that the amount of money coming in to Social Security right now is less than what they're paying out. That happened for the first time last year, and it's probably going to continue for some time.
PAGELet's go to Robert. He's calling us from Miami. Robert, hi.
ROBERTHow are you doing, Ms. Page and guests?
ROBERTYou know, they -- the Republicans are always talking about and suggesting that the -- that President Obama is weak (unintelligible) in what he's doing. But they can't stand up and keep it like Rush Limbaugh and this guy, Grover Norquist, with -- you know, with these pledges. You know, this -- even Alan Simpson even suggested and said, look, this is ridiculous. We ought to do something for the American public.
ROBERTI even heard one of those guys, the senators last night on "PBS NewsHour," suggesting that our mean (unintelligible) of unemployment and food stamps, suggesting that, you know, somehow, people are getting more than they should, that they're living off, you know, like flat tax on these benefits. This is laughable. I mean, it's absolutely laughable that people, that the independents and the Republicans who voted these individuals in and thinking that these people was going to do a great job, and then there's nothing but gridlock, gridlock, gridlock.
ROBERTAnd now we're seeing (unintelligible) Sen. Thomas asked on Fox and said, look, you have these Bush tax cuts. You know, how do you propose on paying for $790 billion, whatever it is, offsetting with some revenue or paying for them? And he had no answer for it. But he won't -- they won't pay for payroll taxes. This is ridiculous.
ROBERTI mean, they want payments -- okay. Thank you.
PAGERobert, thank you so much for your call. You know, Robert mentioned the name of Grover Norquist, quite a famous guy in town because he has a group that has gotten -- most of the Republican members of Congress designed a pledge saying they won't, under any circumstances, raise taxes. To what degree does that pledge affect what Congress does, do you think, Humberto?
SANCHEZIt did for a while. But his influence seems to be waning a little bit in the Senate. They signed this pledge saying, you know, under no circumstances would they raise taxes. And Tom Coburn, I believe, in the Senate was the first one to really confront him about it. And he thought that if you got rid of the tax expenditures in the tax code that -- and put that towards deficit reduction, 'cause Tom Coburn was a member of the Gang of Six, which was a group -- a bipartisan group of senators that were looking for a grand bargain on deficit reduction.
SANCHEZHe thought that that was a reasonable thing to do. Norquist took issue with it and -- but ever since then, you know, he's kind of waned a little bit in the Senate. And he's a great punching bag for the Senate Democrats. They love to say that he's pulling the strings behind the Republican Party.
PAGEDo you agree with that, Dave Welna? Do you think the influence of this anti-tax pledge is beginning to wane?
WELNAYes. I think that Tom Coburn's pushing back on it was the first big crack in the wall of support for Grover Norquist and his Americans for Tax Reform group. We've seen other senators. I talked with Lindsay Graham, a Republican from South Carolina a couple of weeks ago, who said, really? You know, when we're in a situation like this, we have to think about what's good for the country. And, you know, that kind of thinking seems to be spreading. There are some Republicans in the House also who say there's no way they're going to sign that pledge.
WELNAThey are in a small minority. But you're hearing that kind of pushback going on, and, you know, Norquist says that was a pledge for life. You know, you don't -- it's like marriage. You know, you don't say, for the next few years. But I think other Republicans in Congress are looking at the fiscal situation and saying, well, that was then, and this is now.
PAGEHumberto mentioned the Gang of Six, that famous bipartisan group that's tried to move things along in Congress. The Gang of Six met for dinner Monday night to discuss a post-super committee Congress. Can you tell us what their idea is, Janet?
HOOKWell, the Gang of Six was one of the most enduring groups, in terms of the effort to write a deficit reduction proposal that would really reach far, much farther than what even the super committee was aiming for. There was a lot of outside voices that came in to support that approach. We called them the go-big crowd. They wanted the budget writers to go big rather than go small, the idea being, actually, that it's easier to make big changes in a big package than write a smaller package.
HOOKGetting Republicans to swallow tax increases would have been easier if Democrats had agreed to bigger entitlement cuts. Frankly, I think that the air has gone out of that balloon. I think Harry Reid reacted to word that the Gang of Six was back in business by saying, basically, show me a bill. They offered a one-page proposal earlier this year. And a lot of people had high hopes for it. But, right now, I do think that this Congress is ready to stagger into the New Year.
WELNAAnd, I think, one of the things that's complicating things for getting any kind of deal post-failure of the super committee is Medicare. And that is that Democrats would like to run next fall against Republicans, House Republicans who voted for a budget that would shift the Medicare plan to be one where the government would give people money to go out and buy their own private insurance, people who are eligible for Medicare. And they said this cost shifts the expensive medical care to the individuals, and it would be, in effect, reducing their Medicare coverage.
WELNAThat, for them, was going to be a big issue. And if they reach some kind of a deal for deficit reduction, that included cutting back on Medicare, it would, in effect, neutralize that whole argument. So it's in the interest of Democrats right now to stay away from meddling with Medicare, keep this campaign issue alive. And it really diminishes the prospects for any kind of a deal to be struck.
PAGEDo you think, Humberto, that members of Congress, most members of Congress, like this constant partisan warfare in search for advantage because it's like a game? Or do you think that, as a group, they find this situation, like many Americans do, to be a pretty frustrating one?
SANCHEZI think they find the situation pretty frustrating just like many Americans. I think one interesting -- one person who struck me as someone who is particularly frustrated is Lamar Alexander. Lamar Alexander has stepped down from leadership, where he's decided to step down for leadership in order to pursue his own ideas. In particular, he has -- he favors renewable energy, something that's not very pie on the Republican agenda right now.
SANCHEZBut if you talk to him, you know, he'll tell you there used to be a group of maybe 16 Republican senators who you could count on to strike a deal, moderates, and, right now, that there aren't any. There's not a real moderate group within the Senate, on either side for that matter. So it's going to take a few cycles to get back to where there's going to be a middle ground where they can really make deals on big things.
PAGESo they find it frustrating, but they don't seem to be able to fix it or to change the way things are working.
WELNAWell, part of this has to do with the way districts were drawn in many states, the kind of gerrymandering that went on that made districts extremely safe for incumbents, that they didn't have to appeal to people of different political persuasions. You actually see a sort of reorganization of the population, politically, where conservatives move to conservative-minded states and liberals move to liberal-minded states.
WELNAAnd the senators who represent those entire states tend to feel less inclined to make deals across the aisle, too. It's a reality that's going on demographically, and it's showing up in these fights in the Senate.
SANCHEZAlso, the outside groups really have an outside influence right now. It's something that's pretty incredible. The Tea Party demonstrated how powerful grassroots organizations can be. And we'll see whether they have the staying power in this next election, but it -- it's made a difference.
PAGEAnd different spending rules coming up under the -- in the wake of the Supreme Court decision, allowing money -- more money to be used in politics.
HOOKYeah. I know there's going to be lots of money sloshing around in this election. If I could just say one other thing on the polarization, Barney Frank from Massachusetts announced his retirement this week, and he actually said something on this question. He said, "You know, everybody is always saying we should compromise, but any time we try to do anything, all we hear from is the extremes." I mean, all of the lobbying, both in terms of money and in terms of lobbying, comes from -- there is no lobby for compromise.
PAGEI'm Susan Page, and you're listening to "The Diane Rehm Show." We're going back to the phones. Let's go to Sutton, N.H. and talk to Joanna. Joanna, hi. You're on the air.
JOANNAYes. Thank you for taking my call. I'm self-employed. I have been for a long time. And I just want to make a comment about how a lot of my friends and family truly feel. And I don't think the media quite grasp it. We're very upset with the Tea Party, in particular, and the Republican Party, and I'll tell you why. It's because we feel they're just not in touch with the true realities of just trying to get by every day, paying your bills, working hard.
JOANNAIt's like we feel that they represent just, you know, the big corporations, the wealthy, or they want to take away social services, hurt the environment, all those different things. And it's really upsetting because when I hear the media say, well, you know, Americans are upset with Congress. No. It's not just Congress in general. It's these people that have been newly elected, the Tea Party people, and Republicans that are not compromising.
JOANNAThey are just so entrenched. I don't know if it's whether they want to -- you know, all they care about is the next election, and they're going to just do whatever they can to stonewall or throw a monkey wrench into things. But, it's like that's all that matters to them. The -- what the American people need is not important to them. And that's the feeling we are getting here, at least the people that I talk to. And I don't think the media conveys that enough.
PAGEJoanna, thanks so much for your call. It's so interesting here. We have gotten any number of callers and emails making a similar point. Here's one from Kate, who posted on Facebook. "Congress could probably accomplish quite a bit. They will accomplish nothing because of their stand against the president." Now, many of these comments coming from those who are not Tea Party supporters, but rather of a more Democratic bit, but definitely a theme that we're hearing from people.
WELNARight. Well, Sen. Mitch McConnell, the leader of Republicans in the Senate, said shortly after last year's election that the top priority for Republicans was to make sure that President Obama was limited to one term in office. And when you come out saying something like that publicly, it really cast a shadow of doubt over everything you do and say after that, whether it's all meant to simply undermine President Obama's chances at a second term.
WELNAPolling has shown that there is more opprobrium for Republicans than there is for Democrats, in general. And, you know, I think that, because Republicans are the one's who are pushing things to the brink in Congress and taking somewhat intransigent stances regarding, say, for example, increasing revenues to reduce deficits, they are seen as the obstructionists. And for their base, that is exactly what the base wants them to be doing.
WELNABut I think that, for a lot of other people, it's a pretty alienating experience and one that it's hard to see how you get out of unless the composition of Congress changes.
PAGEOne of the other issues Congress will have to deal with that could affect a lot of Americans is what we call the patch on the alternative minimum tax. Janet, just briefly explain to us what's at issue here.
HOOKWell, the alternative minimum tax was established a long time ago as a way of, ironically, for all the talk about millionaires and billionaires, of keeping people from escaping paying any tax just by accumulating a bunch of tax deductions. And it's very complicated, but the way it was written is it's unchecked. Basically, more and more people would fall under the alternative minimum tax, which means that your tax deductions don't count in essence.
HOOKSo, year after year, Congress has been putting this patch on to keep more people from having to pay the AMT. And it's kind of like the Medicare doctors' fixed problem that we talked about earlier. It's something that neither Republicans nor Democrats want to leave unresolved. It is true, though, that the deadline on the AMT fix is a little bit more fungible. Officially, it expires at the end of December, but Congress kind of ceased these tax policies as well. We've got a little bit more time 'cause people won't be filing on this law for another year or more.
PAGEAll right. Janet Hook, congressional correspondent for The Wall Street Journal. We've also been joined this hour by David Welna, congressional correspondent for National Public Radio, and Humberto Sanchez, staff reporter at Roll Call. Thank you all for being with us this hour.
PAGEI'm Susan Page of USA Today, sitting in for Diane Rehm. Thanks for listening.
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