It’s a Good Thing It’s a Leap Year

It’s a good thing it’s a leap year.

In December, Congress nearly blew up Christmas due to a standoff over extending the pay roll tax cut for 160 million working Americans. Lawmakers finally forged a two-month, stopgap agreement which got everyone home just before the holidays.

That deal runs out at the end of February.

And from the looks of it, lawmakers may need the extra, quadrennial day of February 29 just to keep the tax break from expiring again.

In late January, the House and Senate convened a “conference committee” to iron out differences between the bodies on the payroll tax bill to craft a final, unified product. Conference committees are comprised of members from both bodies. The lawmakers sit around a big, circular table and hammer out their differences in the open. This conference committee has met three times with a fourth session slated for Tuesday morning. Any agreement has to be finished in about two weeks for debate on the floors of both bodies at the end of the month. Otherwise, it could be déjà vu.

“I have great concern that we are going to get to the 27th, 28th, and 29th, and we will be in the same confrontation we found ourselves in December,” said House Minority Whip Steny Hoyer (D-MD) to Majority Leader Eric Cantor (R-VA) during a colloquy on the floor Friday afternoon. “That’s not good for your party. That’s not good for my party.”

“We are as anxious as you are to try and resolve these issues,” responded Cantor. “If I thought that working seven days a week through the weekend and all hours of the day and night would make a difference I would be for all that as well.”

To be sure, there’s still a lot of time to forge a pact. But the sides are getting restless. Mainly because Capitol Hill veterans know that past is prologue.

Brinksmanship was the hallmark of 2011 on Capitol Hill. Congress repeatedly teetered on the precipice of disaster: a couple of potential government shutdowns, a default on the federal debt and a near-expiration of the payroll tax break in December. The pre-Christmas fight over the payroll tax flabbergasted many. Senate Democratic and Republican leaders wrote an initial, temporary compromise which passed overwhelmingly. House Republicans then shocked Washington with an outright repudiation of the Senate plan, despite the handiwork of Senate Minority Leader Mitch McConnell (R-KY).

So no one’s surprised lawmakers are starting to get jumpy about the payroll tax cut.

Perhaps cartoonist Bill Watterson of Calvin & Hobbes fame summed it up best.

“I like these cold, gray winter days. Days like these let you savor a bad mood,” he wrote in one of his philosophical funnies.

Republicans contend the talks are going well. Democrats aren’t so certain. Perhaps that’s because the same issues which vexed lawmakers in December are the same ones stressing them now. The main debate centers around whether Congress should pay for the tax cut and if so, how.

The federal government slaps a tax on the paychecks of workers to help fund Social Security. Of the three primary, government entitlement programs, Social Security is on better fiscal ground than Medicare and Medicaid. But many Republicans argued last year they want the tax break paid for. In other words, they want to patch the revenue that’s been stripped coming into the Social Security account.

This is significant because the sides have yet to start actively negotiating what they call on Capitol Hill the “pay fors.”

Democrats are clear about one way to resolve this: assessing a surtax on millionaires. That’s a good political issue for the Democrats. But just as last year, it’s unlikely to gain support from the GOP.

“Republicans have been emphatic that they don’t want to increase taxes on the very, very wealthy…and we haven’t taken it off the table,” said Rep. Sander Levin (D-MI), the top Democrat on the House Ways and Means Committee. “I guess when there’s a wall, we see the wall.”

Also spotting a potential barrier, Senate Majority Leader Harry Reid (D-NV) announced Friday he was prepping an auxiliary bill if the conference committee fails to reach an agreement before the end of the month.

“I just want to make sure they understand there’s a backup plan,” said Reid.

That drew a sharp rebuke from House Speaker John Boehner (R-OH).

“You can’t have a ‘backup plan’ if you haven’t offered anything to back up,” Boehner said in a statement.

A Republican aide familiar with the payroll talks suggested that Reid wasn’t giving his own conferees a long enough leash to negotiate.

“This seems to be a Democrat-to-Democrat problem. Majority Leader Reid picked the Senate Democratic Conferees,” the aide said.

At this stage of the game, Republicans are worried about Democratic gamesmanship on the issue. One of the reasons Boehner eventually gave in to an interim agreement in December was because the public was clocking the GOP in the polls. Democrats sensed blood in the water and pushed the envelope. Some believe Boehner had to finally intervene to save Republicans from themselves. Fast forward to 2012. Republicans are wary about Democrats running out the clock in February in an effort to portray them as obstructionists. The ploy worked in December and Democrats would really like it to work in an election year.

Eric Cantor is fully aware of this potential tactic. His side of the aisle has spent much of the past 14 months bashing the work-habits of the Democratically-controlled Senate. So in his Friday floor conversation with Hoyer, the Virginia Republican was sure to target the GOP’s number one bogeyman: Harry Reid.

“I would ask the gentleman if he could please direct his urgency towards the majority leader in the Senate to see if we can get this off the dime and resolve the issue of the payroll tax so that we can, as the gentleman suggests, send a very certain signal to the people who are struggling out there working day in and day out, that their taxes will not go up,” Cantor said.

In many respects, the tangle over the payroll tax break is the essence which separates the parties. Voters have typically saluted Republicans for their stances on tax policy. Now Democrats see an opportunity to catch the GOP in the lurch and accuse the other side of “raising taxes on the working class” if the sides fail to find a compromise in the coming weeks.

Republicans can argue they’re trying to protect Social Security by making sure the fund isn’t diminished by a tax break. Furthermore, Republicans can assert they’re being “fiscally responsible” by looking for a way to cover the cost of the tax break. And if things go south, they can cast aspersions on their favorite whipping boy in Reid and his Senate colleagues.

Of course, Democrats are quick to point out that the GOP never before asked that a tax cut be paid for.

So here Congress is in February with another big deadline looming. Because of 2012’s leap year phenomenon, February is the only month where the last day of the month falls on the same day it began. Perhaps that’s only appropriate. Because in many respects, it seems Congress may be taking up in 2012 exactly where it left off last year.