House GOP Leaders Reach Agreement On Payroll Tax Cut

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A standoff in Washington that threatened to raise taxes on 160 million Americans and end unemployment insurance for 2.3 million ended Thursday when Republican leaders settled on a short-term agreement that will extend the payroll tax cut. NY1’s Erin Billups filed the following report.

After three days of a stalemate, House Republicans agreed Thursday to pass the Senate bill to extend the payroll tax holiday and unemployment insurance with a couple amendments.

"It may not have been politically the smartest thing in the world, but let me tell you what: I think our members waged a good fight, we were able to come to a agreement, we were able to fix what came out of the Senate,” said House Speaker John Boehner.

For starters, Senate Democrats agreed to immediately appoint members to a committee to resolve the differences that are standing in the way of a year-long extension.

Republicans also pushed for language that would ease the processing burden for small businesses.

"It's very difficult to try and implement two-month tax exemptions, so they're going to try and fix that the best they can,” said Congressman Michael Grimm.

The tide turned earlier Thursday when Senate Republican Leader Mitch McConnell released a statement urging his House colleagues to pass the two-month extension.

Shortly thereafter, President Barack Obama, flanked by everyday Americans, joined McConnell in his call.

"Most importantly, it's the right thing to do for American families all across the country. This is not just my view,” said Obama, “The Republican leader of the Senate said we should do it."

A compromise may have been reached, and crisis averted, but Democrats say this latest partisan stalemate shines a light on the effect Tea Party Republicans are having in Washington.

"It led to the kind of paralysis, the kind of gridlock and deadlock that we saw this past year, but this was the first time they sort of had to wave the white flag," said Senator Charles Schumer.

Still, members of the House GOP argue they were simply trying to deliver what the president asked for: a one-year extension, giving more stability to job creators and the economy.

"This had nothing to do with the Tea Party. We went in in good faith. We believed we had the president on our side. He saw a political opportunity and he took it. Shame on him," said Grimm.

Both houses plan to pass the agreement by unanimous consent so lawmakers, who've already gone home to their districts, do not have to return.