U.S. House of Representatives Speaker John Boehner on Thursday bowed to pressure from both within and outside his party and agreed to a short-term deal to extend a payroll tax cut for 160 million Americans.
In what could be an end to a toxic stalemate, Boehner informed Senate Majority Leader Harry Reid that he will set a vote in the House on a Senate-passed two-month extension of the payroll tax cut, a Democratic leadership aide said.
Now comes the hard part - getting his often rebellious caucus to follow his lead. He is expected to brief members of his caucus later on Thursday, according to one lawmaker's office.
Earlier in the day, Senate Republican leader Mitch McConnell called on the House to pass a temporary extension of the tax cut and then move to congressional negotiations on a payroll tax cut that would extend through 2012.
McConnell's proposal was seen throwing a lifeline to House Republicans who have come under intense criticism from Republican senators and leading conservatives for blocking a bipartisan Senate bill, which would avert an effective $1,000-a-year tax increase on the average worker starting on January 1.
His intervention was the strongest sign yet that the stand-off between Democrats and House Republicans could be resolved since Boehner scuppered the Senate deal last weekend after members staunchly opposed it.
House Republicans sensibly want greater certainty about the duration of these provisions, while Senate Democrats want more time to negotiate the terms, McConnell said. These goals are not mutually exclusive. We can and should do both.
For months many Republicans were cool to extending the payroll tax cut at all, saying it was not an effective economic stimulant. But in recent weeks they have reluctantly embraced it as Democrats relentlessly hammered away at the issue and economists warned failure to extend it by December 31 could deal a major blow to a fragile economic recovery. U.S. Republicans risk backlash in 2012.
There was little daylight between McConnell's proposal and the Democratic and White House position on the issue: pass the temporary extension now and negotiate a full-year deal later.
Seeking to increase pressure on House Republicans earlier on Thursday, an impatient-sounding President Barack Obama said at the White House, Enough is enough.
Has this place become so dysfunctional that even when people agree to things, we can't do it? he asked, surrounded by
Americans who had responded to a White House call for stories on what a lapse in the tax cut would mean for their families.
(Writing by Ross Colvin, additional reporting by Thomas Ferraro, Donna Smith, Kim Dixon, Laura MacInnis and Alister Bull; Editing by Vicki Allen)