Payroll tax cave-in Mister Cratchit!

THE argument that Scrooge was right about Christmas is probably not going to be a winner, either with conservatives or the general public, and I do not expect to see much more of it. It would be interesting if old Ebenezer replaced John Galt as a pro-inequality standard-bearer for a while, just to relieve the tedium, but I worry that when people on the internet start running with this one, it signals that we have so far passed the point of Peak Contrarianism that we are literally running out of obvious commonly held true statements to provocatively deny. "People should be generous to the poor on Christmas. Or should they???" Yes, they should.

In other news, House Republicans caved in and approved a two-month extension of the payroll-tax cut. Charles Krauthammer is right that making tax policy two months at a time is a terrible idea. But the question is what the longer-term implications of the cave-in will be. And what's interesting about Mr Krauthammer's column is that he employs language I never would have expected to see a Republican use when speaking about a tax cut.

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...This is a $121 billion annual drain on the Treasury that makes a mockery of the Democrats’ reverence for the Social Security trust fund and its inviolability.

The Republican talking point on tax cuts is supposed to be that it's the people's money, and talking about a tax cut as a "drain on the treasury" presumes that the money people earned really belongs to the government. In the debate over the payroll tax cut, this attitude has somehow come unglued, and it's hard to understand why.

Jonathan Chait's thesis is that the underlying shift is increasing Republican concern that people in the bottom half of the income distribution pay too little in taxes. This idea has been kicking around conservative think tanks and the Wall Street Journal for a few years, and reached probably its broadest popular expression in the tea-party movement's "We Are the 53%" (i.e. those who pay income taxes) response to the Occupy Wall Street movement's "We Are the 99%" slogan. Another possibility is that Republicans are so strongly driven by a partisan desire to deny legislative victories to the president that they are willing to torpedo even conservative-friendly policies.

Without some such theory, it becomes hard to explain the GOP's stances during the payrol-tax-cut debate. Republicans tried to insist that the payroll-tax-cut extension be paid for with cuts in spending, while they had never insisted that the extension of the Bush-era income-tax cuts for high earners which they won earlier this year be paid for. They insisted they would approve the tax cut only if it included approval of the Keystone XL pipeline. They now argue that the problem with the payroll tax cut extension is that it's too short, even though Democrats would have been happy to extend the cut for a year. In general, they treated the payroll-tax cut as if it were one of the opposing side's priorities, which they would be willing to approve only if they received some goodies in return.

If the cave-in on the payroll-tax cut was just a matter of botched strategy and callow, impetuous tea-party freshmen learning the ropes, then Republicans may be able to regain their footing and start dominating the Congressional agenda again next year. But if the actual problem is that the GOP is now only interested in tax cuts for the wealthy, and not for the poor, that is a political problem that will trouble them long past Christmas.