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Payroll tax cut decision should come soon

Steve Chiotakis Dec 14, 2011

Steve Chiotakis: The U.S. Senate’s expected to vote down an approved House measure extending the payroll tax cut because it includes a couple of items Democrats don’t like. But another bill links the tax cut extension with continuing government funding.

David Mark is senior editor at Politico. He’s with us now from Washington to talk about it. Hey David.

David Mark: Hey. Good to be with you.

Chiotakis: How are these two bills get linked together?

Mark: It wouldn’t seem that they should go together, but this is Capitol Hill, and they become that way. Essentially, the payroll tax is something that we’re going to see a lot of tax rates go up — every working person is going to see their paycheck rise if something doesn’t happen. That’s still optional. What’s not optional is funding the government, and that somehow got tied in with the payroll tax. They’ve still got to pass an omnibus budget.

Chiotakis: And this could lead to another government shutdown? Aren’t we all just tired of the threat of a government shutdown?

Mark: In theory it could, although I’m dubious it’s going to happen this time. I don’t sense the same urgency as we saw with the debt ceiling deal, with the budget battle back late last spring. I think it’s a lot of posturing on Capitol Hill but at the end of the day, lawmakers of both parties want to get out and go home for the holidays.

Chiotakis: Is that what it’s about? It’s about getting outta there?

Mark: Very much so. Also, these battles have been fought before, and it’s becoming a little bit repetitive, and neither side has really gained from these budget battles. So I think they’re kind of turning their attention and resources elsewhere.

Chiotakis: So what do you think’s going to happen in the next few weeks?

Mark: I think they’re going to come to an agreement on this payroll tax dispute within the next few days, and I suspect they will on the budget as well. The way things work on Capitol Hill is just when you think they’re far apart, and things are going to collapse, they go behind closed doors and they hammer out a deal.

Chiotakis: You don’t think election year politics could play any role in all of this?

Mark: I just don’t think it’s in either sides’ interest to have a government shutdown right now. Both sides want to train their attention and their resources elsewhere. And I think they kind of want to save some of that political capital for the election year.

Chiotakis: David Mark, senior editor at Politico. David, thanks.

Mark: Thank you.

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