2012 Legislative Agenda : USPS, Elections Force Hands
Repealing the employer mandate would pass the House, but has no chance in the Senate and President Obama would never sign it, according to Lyons. Thus, two options are more realistic—either the Supreme Court finds it inseverable or Obama fails to get re-elected, and the Republican leadership repeals it.
"Anything that happens in June gets baked into the psyche of the voters," she says. "There's no doubt that it will be reignited as much as a campaign issue as it was in 2010, back when people were throwing tomatoes at town hall meetings."
The Joint Select Committee on Deficit Reduction—the notorious "super committee"—was anything but as it gloriously failed to hammer out a bipartisan plan to reduce the federal budget deficit. They could not reform the tax code, and one of the stumbling blocks was the Bush-era tax cuts.
President Obama wanted to extend the cuts for all taxpayers except those individuals making $200,000 a year or married couples pulling down $250,000 annually. But the super committee threw up the white flag before the Nov. 23 deadline.
At press time, both chambers agreed to temporarily extend the payroll tax holiday—the reduced old age, survivors and disability (OASDI) taxes that fund Social Security—and were searching for common ground to pay for the estimated $263 billion cost.
Extending all the Bush-era tax cuts, which expire at the end of 2012, would tack roughly $3.9 trillion onto the budget deficit during the next 10 years. Tax reform will certainly be a hot-button topic heading into silly season.
"If (the tax cuts) expire, it will represent the largest increase on every single tax bracket," Lyons notes. "What will Congress do? Will they prevent it for certain income levels, or for everybody? Will we get into the millionaire surtax debate? It's fair to say neither Republicans nor Democrats will allow a tax increase on lower/middle income brackets.