Politics Blamed for Payroll Tax Impasse
Was Speaker Boehner right for demanding a year-long tax cut instead of the 2-month plan?
This is a rush transcript from "On the Record," December 19, 2011. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: This is a "Fox News Alert." It is going to be a down-to-the-wire showdown over the payroll tax cut extension! The House of Representatives was going to burn the midnight oil and vote on the extension tonight. They said the vote could come as late as 3:00 AM. But now canceled. There won't be a vote at all tonight. House leaders say they don't want to vote in the middle of the night.
So when will it happen? Well, now they're saying tomorrow. The House and Senate are slugging it out over the payroll tax cut. House Speaker John Boehner says the House will reject the two-month extension passed by the Senate. So can Congress come to an agreement before the payroll tax rate rises on January 1st?
Congressman Allen West joins us. Good evening, sir.
REP. ALLEN WEST, R-FLA.: Good evening, and Merry Christmas again, Greta.
VAN SUSTEREN: And Merry Christmas to you again, sir. In light of the information that there will not be vote tonight and it will tomorrow, your thoughts?
WEST: Well, I think the most important thing is we don't want the American people to believe that we are in the late nights trying to craft something that will be reprehensible to them, much the same as the previous majority did with the Patient Protection and Affordable Care Act.
So we had a great conference in the House GOP, about a two-and-a-half, three-hour conference. We laid out all of our courses of action. And tomorrow, we're going to do the right thing for the American people in ensuring that we have a payroll tax extension, an unemployment insurance extension, and an SGR or "doc fix" for two years and also for the other provisions, for one year, which is the exact same thing that the president, Charles Schumer and also Senator Harry Reid said that they wanted.
The two-month extension is just totally unacceptable. And I'd like to read a couple if quotes. From the National Payroll Reporting Consortium, it says that, "The Senate amendment could create substantial problems, confusion and costs affecting a significant percentage of U.S. employers and employees."
And the Small Business and Entrepreneurship Council said, "Indeed, the uncertainty regarding what happens next following the two-month expiration date will serve as additional fuel to currently low business confidence levels."
We have to instill confidence and certainty for our business creators, and that's exactly what we're going to do tomorrow.
VAN SUSTEREN: All right, January 1 is when the -- if the extension is not enacted, that's when the 2 percent goes up on the Social Security and the payroll tax cut -- payroll tax. Are you -- are you of the mind that no member of Congress should go on vacation, take vacation until his and her job is done and this is resolved one way or the other?
WEST: Well, I've always said that. And as you know, with my history and my background, there have been many times I've been deployed away from my home during the holiday season. But the thing is, we need to have Harry Reid and the Senate come back to Washington, D.C.. And also the president, by the Constitution, can recall the Senate back here so that we can finish this business.
Look, what we're going to do is we're going to reaffirm the fact that we voted last week to have a one-year extension that was paid for, not this gimmick that Harry Reid and these Senate Democrats and Republicans passed of just two months and is not paid for. And then we're going to say if we cannot have an agreement between the House and the Senate, we're going to name conferees for the House to meet with the Senate and come to a resolution on this. We're not going to rest until it's over.
VAN SUSTEREN: It's sort of interesting that Congressman -- or Leader Nancy Pelosi is saying that it is just the radical Tea Party Republicans. Is it just the freshmen Republicans that are the engines behind this, or all the Republicans pretty much on board in the House of Representatives to hold out until a year instead of two months can be worked out?
WEST: Well, it's everyone in the House GOP conference. But I will tell you just the same as we had the S&P downgrade, you saw every liberal talking head on the Sunday morning shows calling it a Tea Party downgrade. The liberal Democrats are very effective in trying to look for someone to blame for their failures. And what you see happening right now is that the president and Harry Reid and I guess Nancy Pelosi are playing political chicken with the American people who are suffering under these failed economic policies.
VAN SUSTEREN: You know, it's sort of interesting. When you look at the numbers -- I mean, this is -- you know, we've been sort of consumed with this fight on Capitol Hill, or the debate or however you want to characterize the past couple of weeks -- but President Obama said on December 17th that what we're talking about is the average American family will get a thousand dollars a year. And if you break that down and if you divide it by weeks, we're talking about $19.23 a week for the average family is what this is now sort of -- this is where we're locking horns on.
WEST: Well, I think what this is, is a leverage point for the president to say that -- cover for his failures, for him to say that the Republicans are going to raise taxes on the, quote, unquote, middle-class. It will enable him to continue on with his very divisive rhetoric about millionaires and billionaires.
I really think in my heart of hearts that the Democrats do want to see this payroll tax expire so that they can use it going into next year as a political talking point in he election cycle.
VAN SUSTEREN: Are you assigning then bad political motive and not just different ideology?
WEST: Well, there are seriously different ideologies, but I think that this overall a bad policy because what we're actually doing is taking a defined contribution, the payroll tax, and we're giving a cut to it.
Now, I think that if you really wanted to solve this for the long term, instead of taking the 2 percent off the payroll tax, let's take that 2 percent and apply it across all the tax brackets then and make it retroactive back to 1 January, and so then the American people could see something that's really substantial and we don't put Social Security at any type of risk.
VAN SUSTEREN: All right, we'll be watching very closely. We're expecting a vote tomorrow. It's not going to happen tonight. That certainly is catching most of us by surprise. Congressman, thank you, sir.
WEST: Thank you so much, Greta.
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