Now that Congress has finally reached a compromise on what must be one of the worst pieces of legislation in years -- the temporary payroll tax holiday extension -- let's survey the damage.
To begin with, what even minimally rational government enacts payroll tax relief for just two months? What business operates two months at a time? The minimal time horizon for business is the quarter -- three months. What genius came up with two? U.S. businesses would have to budget for two-thirds of a one-quarter tax-holiday extension. As if this government has not already heaped enough regulatory impediments and mindless uncertainties upon business.
But making economic sense is not the point. The tax-holiday extension -- presumably to be negotiated next year into a 12-month extension -- is the perfect campaign ploy: an election-year bribe that has the additional virtue of seizing the tax issue for the Democrats.
When George McGovern campaigned on giving every household $1,000, he was laughed out of town as a shameless panderer. President Obama is doing exactly the same -- a one-year tax holiday that hands back about $1,000 per middle-class family -- but with a little more subtlety.
Obama is also selling it as a job creator. This takes audacity. Even a one-year extension isn't a tax cut; it's a tax holiday. A two-month extension is nothing more than a long tax weekend. What employer is going to alter his hiring decisions -- whose effects last years -- in anticipation of a one-year tax holiday, let alone two months?
The House Republicans' initial rejection of this two-month extension was therefore correct on principle and on policy. But this was absolutely the wrong place, the wrong time, to plant the flag. Once Senate Republicans overwhelmingly backed the temporary extension, that part of the fight was lost. Opposing it became kamikaze politics.
Note the toll it is already taking on Republicans. For three decades Republicans owned the tax issue. Today, Obama leads by five points, a 12-point swing since just early October. The payroll tax ploy has even affected his overall approval rating, now up five points in six weeks to 49 percent.
The Democrats set a trap and the Republicans walked right into it. By rejecting an ostensibly bipartisan "compromise," the Republican House was portrayed as obstructionist and, even worse, heartless -- willing to raise taxes on the middle class while resolutely opposing any tax increases on the rich.
House Republicans compounded this debacle by begging the Senate to come back and renegotiate the issue, thus entirely conceding the initiative to Majority Leader Harry Reid. But Reid had little incentive to make any concessions.
House Republicans would have taken the fall for 160 million shrunken paychecks. Every day the White House would have demanded, in the name of the suffering middle class, that Republicans return from vacation and pass the temporary extension.
Having finally realized they had trapped themselves, House Republicans quickly caved, thanks to a fig leaf contrived by Sen. Mitch McConnell.
The GOP's performance nicely reprises that scene in "Animal House" where the marching band turns into a blind alley and row after row of plumed morons plows into a brick wall, crumbling to the ground in an unceremonious heap.
With one difference: House Republicans are unplumed.