Republicans give in to Obama's pay roll tax cut demand

The Republicans, who hold the majority in the US House of Representatives, finally caved in and agreed to extend the pay roll tax cut for two months, as demanded by President Barack Obama and thus gave him a big political advantage on the eve of the election-year.

Welcoming the deal reached by congressional leaders, Obama said it was a victory for Americans.

"This is good news, just in time for the holidays. This is the right thing to do to strengthen our families, grow our economy, and create new jobs," he said in a written statement.

...

"And I want to thank every American who raised your voice to remind folks in this town what this debate was all about. It was about you. And today, your voices made all the difference," Obama said.

Obama's comments came soon after John Boehner, the House of Representative Speaker, announced he has agreed to pass what the Democrats and the White House have been demanding -- to extend the pay roll tax for two months and finally for the year after the Congress convenes in the New Year.

"Senator (Harry) Reid (the Senate Majority Leader) and I have reached an agreement on payroll tax relief on behalf of the American people," Boehner said, adding key parts of this agreement are that on January 1st no American worker will see an increase in their taxes.

"We will ensure that a new complex reporting burden is not unintentionally imposed on small businesses. This solution will, at a minimum, prevent small businesses bearing new administrative burdens and ensure that American workers will see their tax relief as soon as possible," he said.

...

Boehner said the Senate will join the House in immediately appointing conferees, with instructions to reach agreement in the weeks ahead on a full-year payroll tax extension.

"We will ask the House and Senate to approve this agreement by unanimous consent before Christmas," he said.

"I am grateful that the voices of reason have prevailed and Speaker Boehner has agreed to pass the Senate's bipartisan compromise," Reid said in another statement.

"A Year-long extension of the payroll tax cut, unemployment insurance and Medicare payments for physicians has always been our goal, and Democrats will not rest until we have passed them. But there remain important differences between the parties on how to implement these policies, and it is critical that we protect middle-class families from a tax increase while we work them out," he said.

...

The pre-Christmas breakthrough marks a major moment in Obama's relationship with the Republican House -- Obama had come under fire from Democrats for conceding too much too soon throughout the year, but on this deal he's getting exactly what he wants, reported Politico.

The Washington Post reported that by doing so Boehner and the Republicans have bowed to political pressure. "The down-to-the-wire deal -- three days before Christmas -- ends weeks of political brinksmanship between House Republicans and the White House, as both refused to budge on their positions on the tax cut.

A failure to extend the payroll tax cut, set to expire December 31, would have left workers facing smaller paychecks during the holiday season," the daily said.

...

The New York Times said that the Republican leader beat a "hasty retreat" beating a hasty retreat from a showdown that that increasingly saw as a threat to their election opportunities next year.

"The agreement ended a partisan fight that threatened to keep Congress -- and President Obama -- in town through Christmas and was just the latest of the fierce fights between House conservatives, the president and the Democratic-controlled Senate.

But this one seemed to end in a clear victory for Mr Obama and the Democrats, at least for now," Times said.