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House G.O.P. Leaders Agree to Extension of Payroll Tax Cut

By JENNIFER STEINHAUER
Published: December 22, 2011

WASHINGTON - Under a deal reached between House and Senate leaders, the House will now approve as early as Friday the
two-month extension of a payroll tax holiday and unemployment benefits approved by the Senate last Saturday, and the Senate will
appoint members of a House-Senate conference committee to negotiate legislation to extend both benefits through 2012.
House Republicans - who rejected an almost identical deal on Tuesday - collapsed under the political rubble that has
accumulated over the week, much of it from their own party, worried that the blockade would do serious damage to their appeal to
voters.
The House speaker, John A. Boehner, announced the decision over the phone to members on Thursday, and did not permit the
usual back and forth that is common on such calls, enraging many of them.
After his conversation with lawmakers, the speaker conceded to reporters that it might not have been "politically the smartest
thing in the world" for House Republicans to put themselves between a tax cut and the 160 million American workers who would benefit
from it, and to allow President Obama and Congressional Democrats to seize the momentum on the issue.
The agreement ended a partisan fight that threatened to keep Congress and Mr. Obama in town through Christmas and was
just the latest of the bitter struggles over fiscal policy involving House conservatives, the president and the Democratic-controlled
Senate.
Under the deal, the employee's share of the Social Security payroll tax will stay at the current level, 4.2 percent of wages,
through Feb. 29. In the absence of Congressional action, it would revert to the usual 6.2 percent next month. The government will also
continue paying unemployment insurance benefits under current policy through February. Without Congressional action, many of the
long-term unemployed would begin losing benefits next month.
In addition, under the agreement, Medicare will continue paying doctors at current rates for two months, averting a 27 percent
cut that would otherwise occur on Jan. 1.
The new deal makes minor adjustments to make it easier for small businesses to cope with the tax changes and prevents
manipulation of an employee's pay should the tax cut extension fail to go beyond two months.
Mr. Obama, who has reaped political benefits from the standoff, welcomed the outcome.
"This is good news, just in time for the holidays," he said in a statement. "This is the right thing [VERB 1] to strengthen our
families, grow our economy, and create new jobs. This is real money that will [VERB 2] a real difference in people's lives."

(Adapted from http://www.nytimes.com/2011/12/23/us/politics/senate-republican-leader-suggests-a-payroll-tax-deal.html?_r=1&nl=
todays hea dlines & emc=tha2&pagewanted=all)