The rift between the two houses of Congress ”“ exacerbated by last month”™s payroll tax debate ”“ does not bode well for businesses hoping for a legislative lifeline to spur job growth, analysts said as Congress concluded yet another tumultuous session.
House Republicans relented only after Republican Sens. Olympia Snowe of Maine, Scott Brown of Massachusetts, John McCain of Arizona and Bob Corker of Tennessee sent a statement to House Speaker John Boehner calling on him to support the Senate”™s two-month extension of the tax break, which affects 160 million U.S. workers.
In addition to the promise of continued discussion over the payroll tax when Congress returns later this month, several far-reaching issues ”“ such as the Bush-era tax cuts set to expire at year”™s end and the automatic spending cuts that will be triggered starting in 2013 due to the failure of the debt super committee ”“ are likely to be hotly debated throughout the year.
Add to that the burden of an election year with races for 33 seats in the Senate, all 435 seats in the House and the ever-important seat in the Oval Office, and it makes for a perfect storm of politics.
“Their focus is obviously going to be on the election,” said Jeanne Zaino, interim dean of the School of Arts and Science at Iona College in New Rochelle. “If you think of it from a practical standpoint, they have to raise so much money that that alone is going to tie many of them up, on top of which, their approval ratings are so low and dismal at this point that it”™s going to be very difficult for them to do anything.”
Zaino said the election will likely compound the partisan politics that were on display in Congress throughout much of 2011.
“The two biggest things they”™re going to have to address are the Bush-era tax cuts ”¦ and then the automatic spending cuts. I think those are going to be two huge challenges especially with what we”™ve seen in the past two weeks with the extension of the payroll tax cut,” Zaino said.
While issues like the payroll tax hold significance for workers across the U.S., one of the most important political developments of 2012 might come not from Congress but instead from the Supreme Court when it rules on the Affordable Care Act, said Spencer Barback, a partner at accounting firm Citrin Cooperman”™s White Plains office.
“The medical law that was passed is very confusing. I don”™t think anyone understands it, including the people that passed it,” Barback said. “And certainly business owners who pay all or part of their employees”™ medical benefits, they don”™t know what to do. So that has a much bigger impact on the business owner than the payroll taxes.”
He said most business owners are expecting similar sales and earnings numbers to 2011, and that optimism is largely muted among Westchester”™s small businesses.
“From a business standpoint, I haven”™t seen anything yet and it”™s too early to tell that 2012 is going to be any kind of a great year,” he said. “I think people will settle for just having a flat year rather than going the other way. Everything is so fragile, it”™s incredible. Someone blows their nose the wrong way and all of a sudden the market goes down 500 points.”
State and county elected officials weigh in on their policy goals for 2012:
“Small business is responsible for creating most of the jobs nationally, (so) I”™ll be taking a real hard look at regulations and statutes that impact small businesses to see what can be fixed or eliminated.” ”“ New York State Sen. Jeff Klein
“Mandate relief for local school districts and municipalities has to be the number-one priority. ”¦ We have to be able to give some relief to our local governments and school districts in order to comply with the tax cap, which we mandated on them last year.” ”“ New York State Assemblywoman Amy Paulin
“I think we need to turn our attention a little more aggressively to economic development: real estate holdings, and looking particularly at which ones we can get rid of; areas we can develop or assist in developments locally; making smart investments in our roads and bridges. I think that”™s going to be a key theme of 2012.” ”“ Westchester County Executive Rob AstorinoÂ
