Obama Stands Down House GOP Holdouts on Payroll Tax Cuts

The President turns up the heat on Congress, and a temporary deal to extend the payroll tax cut and unemployment benefits is finally reached.

Posted: 12/23/2011 10:55 AM EST
Barack Obama

Ever since people got word that they could kiss as much as $40 out of their paycheck goodbye, the White House has been on a mission to get Congress to see the light. Well, today, Congress did. A deal has been reached as House Republican leaders agreed to demands for a two-month extension of tax cuts for workers.

 

After holding strong against the temporary measure, House Speaker Rep. John Boehner, R-Ohio, relented. He held a press conference, backing the payroll tax cuts and renewing unemployment benefits through February.  He said, “Senator Reid and I have reached an agreement that will ensure taxes do not increase for working families in January."

 

The measure also includes one additional Republican demand aimed at reducing a reporting burden for small businesses. 

 

Both Senate Republican and Democratic leaders had been urging a short-term fix. But contrary to the wishes of some Tea Party caucus members, Boehner caved in to pressure saying, "You know, sometimes, it’s hard to do the right thing. And sometimes it’s politically difficult to do the right thing. But, you know, when everybody called for a one-year extension of the payroll tax deduction, when everybody wanted a full year of extended unemployment benefits, we were here fighting for the right things."

 

The recent stand-off and ultimate concession is viewed by some observers as a defeat for Republicans. Boehner said, "May not have been the politically the smartest thing in the world, but let me tell you what. I think our members waged a good fight."

 

The president congratulated Congress in a statement saying, "Because of this agreement, every working American will keep his or her tax cut—about $1,000 for the average family. That’s about $40 in every paycheck. Vital unemployment insurance will continue for millions of Americans who are looking for work." 

 

Earlier today, the president, flanked by a cadre of average Americans, put human faces behind the political fight. Obama said, “What we have to remind ourselves of is this is about people. This is about the American people and whether they win. It's not about a contest between politicians. “

 

The president said he heard from a D.C. teacher who uses her money to buy pencils and books for her fourth-grade class, and a Rhode Island man who’d use the money to buy heating oil to keep his family warm for three nights.

 

“For others, $40 means dinner out with a child who's home for Christmas, a new pair of shoes, a tank of gas, a charitable donation. These are the things at stake for millions of Americans. They matter to people. A lot,” Obama said.

 

After weeks of back and forth the president said, "This is exactly why people get so frustrated with Washington. This isn’t a typical Democratic-versus-Republican issue. This is an issue where an overwhelming number of people in both parties agree.” He added, “It doesn’t make any sense.”

 

Today’s turn of events may have brought the stalemate to a temporary end. Now the goal post has moved for Congress to extend the payroll tax cut and unemployment insurance for the rest of 2012. As part of the deal, Senate leaders will appoint a conference committee to negotiate a full-year tax cut after January.

 

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(Photo: Mark Wilson/Getty Images)

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