The House seems ready to vote down the Senate bill extending the payroll tax cut for two months while requiring the President to decide on the Keystone XL oil pipeline within 60 days (see coverage here and here). The bill—apparently negotiated with the Speaker’s blessings—seemed to be a strategic coup. Passed (89-10) by a bipartisan majority in the Senate, it seems to work against the dominant narrative of the Republican obstructionism. By extending payroll tax cuts for two months, it would limit the GOP=Grinch meme that will undoubtedly fill the airways. By forcing a decision on the pipeline, it will force the administration to alienate one of its two core constituents: organized labor (which strongly supports the pipeline) and environmentalists (who strongly oppose it). The president wanted to delay a decision until after the election to avoid having to reinforce fissures in his support base.
The House GOP rank-and-file wants a one-year extension to take the issue off of the table until after the elections. At the same time, it wants it paid for via spending cuts rather than tax increases. Speaker Boehner, who supported the Senate bill, seems once again incapable of reigning in the rank-and-file.
There is a strong case to be made against extending the payroll tax cut. Our entitlement programs are already on life support; cutting the flow of revenues will only hasten their collapse. And given the need to reduce the size of the deficit, there is a strong case for spending cuts.
Good politics often makes bad policy. But the political benefits of the Senate bill appear too good to pass up.
Or am I missing something?