I’ll admit it, I’m one of those who felt Boehner gave in too soon on the payroll tax showdown, but it’s like, “Who knew“?

“It appeared, remarkably, that 89 United States senators voted to pass a bill making a major change to the payroll tax without bothering to ask the companies that actually process payrolls if they could implement the change.

The Senate bill did not cleanly extend the current Social Security employee share of 4.2 percent for two months. Instead, it created a two-tiered payroll tax with a rate of 4.2 percent for the first $18,350 of income in those 60 days, with a 6.2 percent rate above that.

This establishment of multiple rates of payroll tax presents serious logistical challenges for payroll processors. In fact, the National Payroll Reporting Consortium strongly opposed to the Senate bill based on this feature, writing:

“The difficulty is in establishing a new Social Security Taxable Wage limit of $18,350 for the two-month extension period. More than ten percent of the workforce is likely to meet that limit, and would be subject to the higher 6.2% tax rate for earnings over that amount. However, many payroll systems are not likely to be able to make such a substantial programming change before January or even February. The systems affected tend to be highly complex, normally requiring at least ninety days for a change of this magnitude for software testing alone; not to mention analysis, design, coding and implementation.”

Forcing such a change without time to properly develop and vet the software to implement it would have been a complete disaster.
Payroll processors would have passed on the fees associated with the crash programming changes to employers; companies that do their own payroll would have been desperately scrambling to implement the new feature; many companies would be left facing IRS penalties for failing to implement a change that nobody was prepared to implement.

Thanks to the leadership of Speaker John Boehner, that disaster has been avoided.

While the Senate refused to come back to work to hammer out a year-long agreement or to act on any of the other critical elements of the House-passed version, the Senate and the White House backed off their demands that the House pass the deeply flawed Senate bill.
Instead, by unanimous consent Congress passed and the president signed a new bill, H.R. 3765, which unlike the Senate bill allows payroll processors to keep the employee share of Social Security contributions at a flat 4.2 percent for two months. (It uses a clawback tax instead, which Congress can and will eliminate when they pass a longer extension.)

At this point I doubt this get’s out into the public’s mind. If the Democrats won anything – with the help of course of the MSM – they won the battle over the “who’s for ya” message, as evident by Obama’s bump in the polls. Why didn’t the GOP get this out during the fight? As usual our blowback sucks. Need to work on that or else.