GOP Caves on Payroll Tax

Maybe they are finally realizing their extremism has backfired in President Obama's favor.

http://www.washingtonpost.com/politi...iBR_story.html


By Paul Kane, Published: February 13

House Republican leaders said Monday that they will support extending the federal payroll tax holiday through the end of the year without demanding spending cuts to pay for it, a concession aimed at averting another po*litically damaging showdown in Washington.

The House leadership could offer a pared-down measure to extend the tax cuts later this week. But the top three GOP leaders backed off previous demands that the tax break’s extension be accompanied by spending reductions to shore up the finances of the Social Security program, which is funded through withholding taxes.

Instead, House Speaker John A. Boehner (R-Ohio) and his top lieutenants said they do not want to be held responsible for the tax increase on 160 million workers that would happen if the tax holiday were not extended.

The two sides have been negotiating for weeks but have been unable to strike a deal. Republicans want to continue negotiations over financing the rest of the original legislative package, including an extension of un*employment benefits and a key tweak to maintain Medicare reimbursement rates for doctors, while ensuring that taxes will not rise on workers.

“Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue,” Boehner, House Majority Leader Eric Cantor (R-Va.) and House Majority Whip Kevin McCarthy (R-Calif.) said in a joint statement.

The statement came as negotiations between members of a House-Senate conference committee, asked to iron out differences between the two versions of the legislation, remained stalled over how to finance the roughly $150 billion package.

Democratic leaders said they would prefer moving all three measures in a single piece of legislation but did not rule out supporting the House Republican compromise proposal to act on the tax holiday separately. That portion of the deal is estimated to cost $100 billion over the next 10 months.

“The Republican plan to decouple the payroll tax jeopardizes both the ability of seniors to see their Medicare doctors and benefits for millions of Americans who lost their jobs. There is no reason all three of these priorities cannot proceed at the same time as both the House and Senate agreed,” House Minority Leader Nancy Pelosi (D-Calif.) said in a statement.