The Obama administration is telling federal agencies to prepare for a possible government shutdown, as Democrats and Republicans remain deadlocked over extending a payroll-tax break due to expire at the end of the year. Both sides want to prolong the tax holiday, but they disagree over how to pay for it — Democrats want a surtax on millionaires, and Republicans want Medicare premium hikes for upper-income seniors, among other measures. To force a deal, Senate Democrats have tied the issue to a spending bill, and if that's not passed the government will run out of money at midnight Friday. How can they avoid disaster? Here, four possible solutions:
1. Pass a short-term spending bill, then talk
Neither party is eager to close government agencies' doors, says Erik Wasson at The Hill, since both "stand to be blamed by the public if the government shuts down." Congress has "lurched toward shutdowns repeatedly this year, only to avert them, often at the last minute." Passing a short-term spending deal will buy more time. And with "brinkmanship on both sides" holding up the $1 trillion spending package, it's looking increasingly like that's the only way out.
2. Democrats cave, by giving up on the millionaire surtax
In what CNN says would be a "major concession," President Obama and his fellow Democrats may be preparing to drop their insistence on sticking the wealthy with the bill, says Allahpundit at Hot Air. That would sting, "given how well tax hikes on the rich poll." But let's be honest. "There was no way" Dems could make their plan fly. If they'd just untie the matter from the spending bill and make a deal, the GOP will probably drop the fast-tracking of a decision on the Keystone XL oil pipeline, in exchange.
3. Republicans cave, by dropping their poison pills
"As they've repeatedly done before, the GOP is exploiting the imminent shutdown of the government to push its conservative agenda," says Marie Diamond at Think Progress. They're insisting on sidestepping environmental regulations to push through an oil pipeline, and protect the rich. "This is the third time this year Republicans are using the threat of a government shutdown to get what they want." If they would just drop "these brinkmanship games" it would be easy to "compromise on a bill to keep the government’s lights on."
4. Let the payroll-tax holiday expire, and get back to business
"In their rush to head home for the holidays," says the Chicago Tribune in an editorial, neither party is mentioning how extending the payroll tax cut and jobless benefits "would add to our already enormous national debt." The payroll taxes are supposed to go into the Social Security system, which is "already imperiled." It might have made sense to help struggling families out with a tax break in 2011, but it's "foolhardy" to keep this up. Congress should let the payroll tax break die and get back to work — future generations of retirees will be grateful.