As 2011 draws to a close, the politics around the payroll tax extension is getting dirtier… or should I say oilier.

The latest demand by House Republicans (floated by House Speaker John Boehner, R-Ohio) is to link the payroll tax vote to the passage of the Keystone XL pipeline project. The proposed TransCanada pipeline would link oil sands in Alberta, Canada with a pipeline terminal at Cushing, Oklahoma, through Nebraska and thence to the Gulf Coast refineries of Texas — stretching over 1,700 miles.

Proponents of the $7 billion project say it would lessen America’s oil dependence on the Middle East while also creating thousands of jobs and new distribution opportunities for the land-locked oil in our western states. Democrats don’t necessary oppose the project; however they argue that the plans for the pipeline may need to be rerouted to avoid going through environmentally sensitive areas, including fresh-water reserves. To deal with these concerns, President Obama’s State Department recently postponed a verdict on the project until early 2013, while an alternative route is considered.

But what does this pipeline have to do with payroll taxes? Is this starting to sound like the shaky plot of the latest Muppets movie where Kermit and pals must battle “Tex Richman,” a billionaire baron who threatens to turn their studio into his latest oil venture? Bear with me; the connection takes some explanation.

Over the past week, President Obama (our Kermit) has hit the Republicans hard fighting to keep the 2% payroll-tax reduction slated to expire by year’s end. “This is the defining issue of our time. This is a make or break moment for the middle class,” Obama told a cheering crowd in Osawatomie, Kansas. Regarding the payroll tax, Obama said it was essential that we not take money out of the hands of working Americans when they need it most. “At stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home and secure their retirement,” he said.

Economists disagree about the stimulus effect of the tax cut which amounts to about $1000 per family annually. At best most economists say it’s minimal and argue that the policy is a poor substitution for more expansionary measures such as construction which generates jobs or direct assistance to lower income families like Food Stamps.

Even so the tax cut is politically popular. At a time when most families are struggling, the tax cut is an easy-to-understand gesture and therefore hugely popular among voters. Even Republicans know they will get hammered in the polls if they let it expire. That said, Republicans don’t like the way the Democrats are paying for the tax cut.

The Democrats have proposed funding the cut (which will cost $185 billion in lost revenue) by levying a 2% tax on millionaires. Republicans are adamantly opposed saying the new taxes will hurt small business owners who are the engine of economic growth.

While House leader John Boehner sympathizes with these arguments, he also recognizes the dire political consequences of not playing ball. He wants to pass the payroll tax cut, but in order to get his party on board he has to “sweeten the deal.” In true “Tex Richman”-style, he offered up Keystone XL to win over fiscal conservatives who are wary of the tax package but support big oil.

The Republican bill would divest Obama’s State Department of the power to regulate the project giving to the Federal Energy Regulatory Commission. The independent agency would have only 30 days to issue an initial permit for TransCanada’s proposed pipeline thus eliminating additional environmental review. (Begin moustache-twirling now.)

Senate Democrats are furious saying that the bill is the equivalent of giving the project a rubber stamp. In a letter to Sam the Eagle… I mean… Senate Majority Leader Harry Reid, D-Nev., five Democrats (spearheaded by Fozzie Bear… I mean… Sen. Bernie Sanders of Vermont) called the GOP tactic “completely inappropriate” and said they “strongly oppose the inclusion of provisions that require approval of this pipeline in an arbitrary timeframe.”

Meanwhile, President Obama who met with Canadian Prime Minister Stephen Harper on Wednesday, said that he would block any measure to tie the payroll tax to the pipeline — or any other “tack on”‘ legislation the Republicans may propose.

And there will be more. In a meeting on Wednesday with Boehner, House Majority Leader Eric Cantor clamored for the inclusion of a corporate repatriation bill, which would cut the top U.S. corporate tax rate for companies repatriating foreign profits.

This week, conservatives on Fox News argued that the Muppet movie was communist brainwashing dished out by the liberal media. How dare Hollywood suggest that evil oilmen are ruining our communities or that monied interests squash the little guys? The sad truth is in that in today’s political environment, the Muppets movie seems less like trumped-up propaganda and more like cinéma vérité.

If it wasn’t apparent before last night’s Republican debate, it certainly is today. As Rick Perry made headlines with his “brain freeze” and Herman Cain fends off sexual harassment charges, Mitt Romney coolly emerges as the only real contender in the Republican primary.

Only a few short months ago, Romney had real competition. Perry seemed like a great anti-Romney candidate. Strong with the Tea Party, he was a strapping Texan who provided a sharp contrast to Romney’s overly-slick citified image. Other Republicans had high hopes for Jon Huntsman, an intelligent conservative who spoke Mandarin, understood economic policy and could attract the independents to win a general election. Then there was the surprise swell of late-bloomer Herman Cain, an entrepreneurial businessman whose straight-talking won the hearts of people tired of Washington insiders.

But these contenders seem to be exiting the field, just as quickly as they came. It’s nothing to do with Romney’s newfound charisma or excellent campaign strategy. These candidates are doing fatal damage to themselves — quickly becoming (in stature) like the seven dwarfs.

Dopey – Any doubts voters had about Rick Perry’s inability to remain composed were solidified in last night’s debate. A slip of the tongue is one thing. A giddy cuddling with a maple syrup jar at a New Hampshire fundraising dinner is another. But flat out forgetting a major piece of an economic plan you authored may be the last straw.

In his presentation of which agencies he would dismantle as president (education and commerce being two of them), Perry could not remember the third. He was cued… “Is it the EPA?” Ron Paul suggested. Perry looked over his notes, sinking his chin to his chest, but was dumfounded. Finally he looked at CNBC’s John Harwood and said, “Oops.”

While it goes without saying that quoting Britney Spears is never a good idea for a presidential candidate, the real trouble is that Perry revealed that his mind is not sharp enough to remember key elements of his own plan. The mistake was not the only of the night. Later, perhaps rattled by his former gaffe, Perry said “We have a culture in Washington, D.C., where these corporate lobbyists have these cozy relationships with the people that they’re regulating.” But corporate lobbyists don’t regulate anyone. At least I hope not.

Grumpy – Say what you will about Herman Cain, but he sounds like a lot of us feel — which is angry at the state of the economy and everything else. The empathetic irascibility Cain exudes is probably why he has gained so much traction with voters.

Aside from being annoyed at the status quo and the-mess-that-is-Washington, he seems most irritated by pesky reporters. His strategy — and one that has turned out to be quite brilliant — is simply to ask reporters the same question he’s been asked and walk away. The befuddled reporter stands there too confused to chase after him. A personal favorite is when he barked back at the first reporter who asked him about the sexual harassment charges while he was at Godfather’s Pizza. He got right in the guy’s face and said: “Well, have you ever been accused of sexual harassment?” and kept moving. It’s all very Archie Bunker, Mr. Cain, and it works.

In the last few weeks, Cain has run head-to-head with Romney. That said, anyone who is “serious” about the election says that his Häagen-Dazs Black Walnut will eventually melt under the glare of national attention. The continued harassment charges coupled with what looks to be some pretty serious campaign finance allegations will eventually wear on Mr. Cain’s reputation. That, and there is evidence that voters get more discerning about qualifications as elections draw near.

Doc – Newt Gingrich has always been the “elder statesman” of this cadre of candidates. In the polls, he’s now benefiting from the recent cracks in the Cain and Perry campaigns. Gingrich is now running third tied with Perry. The problem is that there’s nothing fresh about Gingrich. He’s running on the same ideas and policies he did back in 1994, and while he still fervently believes in them, his ideas and his tactics seem like something out of a different era.

Bashful – Jon Huntsman is seen as a strong statesman, respected moderate and true intellect. As the former governor and recent ambassador to China, Huntsman had the credentials and the buzz to be a frontrunner. Still, his campaign never caught fire. Some say his moderate stances were not enough to fire up Republican support, leaving the mild-mannered Huntsman lost in the single digits. He himself admits his website is getting less hits than a video his daughters made for him on YouTube.

Happy – Michele Bachmann. Does this woman ever stop smiling? Bachmann is happy; she’s just happy to be there. Think about how quickly Bachmann rose to this stage. Just last year she was the liberal media’s punching bag and today she’s a Republican darling in the ranks of Sarah Palin. She’ll never make it to the White House, but that doesn’t seem to ruin her mood.

Sneezy – Ron Paul ranked strongly among Republican listeners last night, but nothing now is enough to put him within striking distance of the prize. Plus, he looks like something is agitating his nose; doesn’t he? (Insert lame joke here.)

Sleepy – Rick Sant… wait, who? I’m already asleep.

As the seven non-Romney candidates continue to shrink in stature, the polls will soon begin to reflect Romney edge. For Romney, it’s not about having a better strategy, more money, or brilliant policy ideas. It’s about staying cool and being prepared. In this year’s run, he is certainly the fairest of them all.

We are just one week away from when the Super Committee needs to deliver a deficit-reduction proposal to the Congressional Budget Office and the group is stuck on — you guessed it — the question of whether or not to remove tax loopholes for the richest Americans. Does this feel like déjà vu?

The 12-member Super Committee of Congressional and Senate leaders was formed as a compromise when budget negotiations went south last summer. The Committee was tasked with finding $1.2 trillion in savings by Thanksgiving or an automatic provision would kick in reducing Medicare by $600 billion and defense by the same amount — a stinger to both sides of the aisle. To make the November 23rd deadline the Committee has to deliver its proposal to the CBO to “run numbers” two weeks ahead of time — i.e. in the next few days. But just like last summer, both sides remain in a heated debate, which is looking more and more like class warfare.

Thus far, the Committee has been largely secretive about negotiations. What we do know comes from leaks and this week’s first public hearings: Democrats have proposed $3 trillion in savings; Republicans have proposed $2.2 trillion. In Erskine Bowles’ (co-author of the Simpson-Bowles plan) speech to the Committee this week encouraging both sides to embrace their common ground, some specifics emerged, including that both plans propose:

  • $600 billion in Medicare savings (in part by raising the eligibility age from 65 to 67)
  • $300 billion in cuts to other entitlements (not specified further)
  • $200 billion in savings by lowering cost-of-living increases (CPI) for pensioners and Social Security recipients.
  • $900 billion cap on discretionary spending for the next decade, agreed to in August. Democrats are upping the ante proposing another 400 billion in cuts; Republicans propose just under $50 billion.

What, then, accounts for the $800 billion difference between what the Democrats are offering and what the Republicans are willing to accept? You guessed it — taxes.

Over the summer, House Speaker John Boehner and Majority Leader Eric Cantor were invited to the White House to meet with President Obama and Secretary of the Treasury Tim Geithner to hear their plan to close tax loopholes and restructure the tax code. If implemented, the effort could find $800 billion in savings. It was nicknamed “the grand bargain.”

Back then it wasn’t something Boehner could sell to his Tea Party caucus. But given the political backlash his members felt then and some repackaging now, he’s hoping he can sell it. The idea is to present this to his folks as a “tax restructuring” rather than a tax increase. That way, a Republican who had signed the Grover-Norquist-no-new-taxes pledge (including himself) could keep their promise.

Enter Grover Norquist. According to Talking Points Memo, “The well-funded anti-tax crusader has secured pledges from the vast majority of Republican members of Congress, including all six GOP members of the Super Committee, to never raise taxes.” As such, Norquist is doing everything in his power to stop Republicans from folding on this issue.

What is likely to be at issue are two main points.

First, Democrats want $200 billion in tax revenue increases upfront, which, they say, could be achieved in some significant part by eliminating deductions that benefit the wealthiest Americans — corporate jets, race horses and carried interest. Second, Democrats want a firm commitment to end (once and for all) the Bush Tax Cuts of 2001, which are up for renewal next year. Republicans (read Grover Norquist) are not amenable to either.

In recent days, a gaggle of Republicans have tried to talk some sense into their Republican brothers. Former Wyoming Senator Alan Simpson, Georgia Senator Saxby Chambliss and former New Hampshire Senator Judd Gregg, have all made presentations to the Committee arguing that the Republicans are nuts to walk away from a deal in which the Democrats are willing to cut treasured programs like Social Security and Medicare. Simpson even took a personal poke at Norquist saying, “If Grover Norquist is now the most powerful man in America, he should run for president,” Mr. Simpson said. “There’s no question about his power. And let me tell you, he has people in thrall. That’s a terrible phrase. Lincoln used it. It means your mind has been captured. You’re in bondage with your soul.”

But, Mr. Simpson, that’s just where the Republicans are — in bondage to Grover Norquist and to all those monied interests who want to keep their tax credits for corporate jets and their low tax rates courtesy of George Bush. It’s greed — plain and simple — and at the hand of that greed the rest of America will suffer.

It’s time for Republican themselves — at the call of their elders this week – to stand up to the bullies and the tea-partiers and harken back to the wisdom of old. You can’t get what you can’t pay for — even if you are rich.

The stock market this week looked more like Mr. Toad’s Wild Ride than the financial workings of the world’s largest economy. On the news that the S & P downgraded America’s credit rating, coupled with less-than-sunny economic indicators, the Dow Jones erased $3 trillion of value from July 22nd till August 8th. Then it began a dizzying roller-coaster of ups and down, which is leaving regular Americans quaking in their boots.

Just like the Hollywood blockbuster The Hangover — just when you thought it couldn’t get any worse…it does. It is not just the uncertainty or the loss of equity that’s getting to regular folks, but also the straight-up fatigue at our lingering economic woes. Since the stock market crash of 2008, it seems like America can’t catch a break — from our anemic growth rates, to unemployment, to the total inability of our politicians to do anything about it. Read more…

Most Americans came home Monday night after a long day at work to find President Obama preempting their favorite TV shows. Having reached an impasse with the Congress over raising the debt ceiling, Obama took his case took his case to the American people. This is not the first time the president has reached out to us in the face of partisan stalemate. With this Congress, it is won’t be the last.

Like most Americans, I am frustrated by the debate over the debt ceiling. I am irate at the Tea Party for creating the crisis in the first place by linking debt default to deficit reduction. I am perplexed by House leader John Boehner for being unable to control his ranks to bring the freshman agitators to the negotiating table. I am disappointed that the Democrats (and Obama) did not preemptively deal with the debt at a time when they controlled both houses of Congress.

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A casual observer of the debt ceiling debate may be baffled by the Republican Party’s actions. Are they really going to send the American economy off a cliff by drawing an ideological line in the sand and demanding that Democrats be pushed to unreasonable extremes? Are they really that crazy?

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My fellow Republicans, I am pleased to report to you today… far from the beltway media …that the end is near. Don’t get too excited: I’m not talking about the actual Apocalypse. (Only Harold Camping can predict that.) I’m talking about the economic Apocalypse that will be brought on when the U.S. defaults on its debt this August.

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Sarah Palin is the Honey Badger of American politics — pursuing her goals despite all obstacles, despite naysayers, even despite logic.

Don’t know the Honey Badger? You’re in for a treat. Over 8 million people have delighted in this bizarre Internet sensation, in which the flamboyant “Randall” voices over National-Geographic-like footage of this interminable predator. The similarities to Ms. Palin stand out, especially given her recent One Nation Bus Tour:

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It’s official. As of Monday, May 16, the United States of America has reached its debt limit ($14.294 trillion). That means that the Treasury Department can no longer borrow money to pay the debts or meet the expenses of the U.S. government. You may say, wait, the sky didn’t fall. People are not running in the streets in chaos. The stock and bond markets haven’t crashed. I had my latte this morning and it was delicious. So what’s the big deal?

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Sunday, just before midnight, President Barack Obama told the American people that Osama Bin Laden was dead. Thanks to an American-led mission, Bid Laden had been cornered in a compound outside of Islamabad, and after some gunfire, was killed.

Over the next days, details will emerge of the actual event. But what we can say tonight is that President Obama will receive great political accolades for his efforts. He is already being positioned as the leader that focused on the right mission rather than the wrong war.

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