President Barack Obama didn't get much out of the initial two-month deal to extend his payroll tax holiday. But the revolt by House Republicans against the Senate-passed measure gave the White House a chance Monday to portray the GOP as being taken over by a fringe that is willing to risk a tax increase on every worker.
For the White House, it's a simple political win-win — Obama takes credit if the tax cut gets extended or pins the blame on the GOP if it doesn't.
"Blowing up the process right now is playing politics with the payrolls of 160 million Americans," White House Press Secretary Jay Carney told reporters Monday.
While the White House desperately wants the payroll tax cut to be extended — it sees it as a critical political and economic victory ahead of the November elections — it also believes the public will punish House Republicans if a tax hike occurs after 89 Senators voted to prevent one.
The White House was as stunned as anyone when House Republicans balked at the deal, sources said. Obama himself had declared it a victory Saturday for the middle class.
Indeed, senior administration officials Saturday talked about the bill as a done deal, one they contended would benefit them politically because they believed Republicans would be hard-pressed not to continue the tax cut and unemployment benefits come February — in the midst of an election year. But while they talked up the bill, it is far from a slam dunk for the president. It provided about $30 billion of the $447 billion he called for in his American Jobs Act and didn't fund any of the new initiatives and tax cuts he proposed.
The Saturday spin from the White House also belied the vulnerabilities the measure would create for Obama. It fell short of his goal for a full-year extension, and there was no guarantee he would have the political upper hand on the issue come February. Plus, the deal, which included an imperative for the president to act on the controversial Keystone XL pipeline, would put him in an uncomfortable position two months from now when he would be forced to decide between union backers of the pipeline project and environmentalists who oppose it. It also included provisions that could make mortgages more expensive to refinance.
But Obama now has a bipartisan compromise in hand and a GOP bogeyman to blame for its potential failure.
After all, Obama personally called and thanked Senate Minority Leader Mitch McConnell (R-Ky.) and Majority Leader Harry Reid (D-Nev.) for working out a bipartisan compromise.
But in another sign of Obama's aloof relations with Hill Republicans, he did not call Speaker John Boehner (R-Ohio) before or after making his "victory" statement.