Republicans cave to payroll tax cut deal
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House of Representatives Republican Speaker John Boehner has agreed to accept a bipartisan deal to extend a payroll tax cut, in an abrupt U-turn, reports the BBC.
He had refused a vote on the bill, which was passed by Republicans and Democrats in the Senate last Saturday.
Correspondents say the move amounts to a cave-in by House Republicans, and victory for President Barack Obama.
The tax break is due to expire on 31 December, and would hit the pay slips of some 160 million American workers.
The cut saves about $1,000 (£638) each year for an average US income.
Republican rift
Under the compromise, House Republicans get face-saving language on making the package more friendly to small businesses.
And Senate Democrats will appoint negotiators to work out a year-long deal which was demanded by House Republicans and sought originally by Mr Obama.
Key elements of the Senate bill remain: an extension of the tax cut and unemployment benefits for two months.
A Republican-backed clause forcing Mr Obama to make a decision on the controversial Keystone XL oil pipeline within 60 days also remains.
The new deal will require Senate and House approval.
After briefing rank-and-file members of his party, Mr Boehner said in a news conference that the House would vote before Christmas.
“We were here fighting for the right thing,” Mr Boehner said when asked if he had caved. “It may have not been politically the smartest thing to do.”
President Obama, who with his Democratic allies has kept up relentless pressure on Republicans over the stalemate, welcomed the breakthrough.
“This is good news, just in time for the holidays,” he said in a written statement. “This is the right thing to do to strengthen our families, grow our economy and create new jobs.”
Earlier in the day, the president read out messages at a news conference from voters who said the package would help them pay their heating bills, visit elderly relatives and treat their families to pizza dinners.
Unlike other budget stand-offs this year, this one has exposed Republican divisions.
Earlier on Thursday, Senate Republican Minority Leader Mitch McConnell broke his silence on the issue to urge his House colleagues to pass the measure.
Two freshman House Republican lawmakers also called for a vote, breaking the unified front shown by members of that chamber in a news conference on Tuesday.
Earlier in the week, other Republican senators lambasted their House colleagues for opposing the deal.
And on Wednesday the Wall Street Journal’s conservative editorial labelled the episode a “fiasco” that could end up re-electing Mr Obama.
Many Republicans were initially sceptical about extending the payroll tax break, which economists say would aid US economic recovery.
As party leaders demurred over how to offset the $120bn (£76bn) cost of the plan, Democrats accused them of backing tax cuts only for the wealthiest Americans.
Correspondents say Mr Boehner’s about-turn reflects a realisation by Republicans that they would have faced blame for an effective tax rise on middle-class Americans in a general election year.
Clearly, this was a huge victory for President Obama.
Reporting by the BBC
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GOP are morons and don’t give a dam about the 99%. If the election were two years away they would have refused to give in and only since the elections are in 2012 did they cave in. Shame on GOP.
These clowns caved because of political pressure not because it was the right thing to do for Americans.