House Republicans on Thursday reversed course and ended their opposition to a short-term extension of a payroll tax cut, but only after a two-day standoff with the Senate and the White House and pressure from their own party to back the deal.
House Speaker John Boehner, R-Ohio, said the House will approve the two-month extension Friday by voice vote, meaning it would pass as long as no lawmaker objects. Republican aides said they do not expect any of their members to block the legislation, despite efforts by the House GOP’s more conservative members to reject the short-term measure.
If the House had refused to endorse the two-month extension, the payroll taxes deducted from their paychecks of 160 million Americans to pay for Social Security would have increased by 2 percent on Jan. 1.
The bill on which the House will vote is slightly different than the version passed last week by the Senate because it eliminates a tax reporting requirement for small businesses, so Senate Majority Leader Harry Reid, D-Nev., will have to clear the measure before sending it to President Obama for his signature.
“Sen. Reid and I have reached an agreement that will ensure taxes do not increase for working families on Jan. 1 while ensuring that a complex new reporting burden is not unintentionally imposed on small business job creators,” Boehner said.
In addition to the two-month extension of the payroll tax cut, the bill extends unemployment benefits and a provision ensuring Medicare payment rates for doctors.
In exchange for the House’s support, Reid agreed to Republicans’ demands that a bipartisan group of negotiators be appointed to work out a long-term tax cut extension.
The agreement comes after a politically brutal 48 hours for the House Republican majority.
The House GOP, prompted by its Tea Party-backed freshmen, had been insisting on a long-term deal that included reforms to jobless benefits and offsets, such as a pay freeze for federal workers, that would cover the cost of the tax cut. The House also wanted to allow states to test those receiving jobless benefits for drugs.
But Republicans quickly lost the public relations war after the White House and congressional Democrats accused them of supporting a tax increase. Democrats said Republicans would be blamed in next year’s elections if Congress failed to extend a tax cut that provides the average family about $1,000 a year.
President Obama on Thursday appeared at the White House flanked by people who would lose about $40 per paycheck if the tax deal had failed. “Enough is enough,” he scolded.
Adding to the pressure on House Republicans, Senate Minority Leader Mitch McConnell, R-Ky., called on the House to back the short-term measure in exchange for the appointment of negotiators.
McConnell noted that the short-term deal includes a key victory for the GOP, a provision that would speed construction of the Keystone XL Pipeline from Canada to Texas that Republicans believe will create tens of thousands of jobs.
Boehner, while not admitting defeat on Thursday, acknowledged being bested by Democrats.
“We were here fighting for the right thing,” Boehner said. “It may not have been politically the smartest thing in the world, but our friends waged a good fight and we were able to come to an agreement and fix what came out of the Senate.”
