By Arun Kumar, IANS,
Washington : Bowing to intense pressure from his own party, John Boehner, speaker of the Republican controlled House, agreed to a deal to extend payroll tax cuts handing President Barack Obama a major political victory.
The deal between House Republicans and Senate leaders Thursday ended a partisan standoff that had paralysed Washington at the height of the holiday season and would ensure that over 160 million US workers will pay lower payroll tax for at least two more months.
The deal struck by House Speaker John Boehner and Democratic Senate Majority Leader Harry Reid approves a $33 billion extension of the current rate of 4.2 percent instead of 6.2 percent in the tax that pays for Social Security and extends unemployment benefits set to expire Dec 31.
Obama, who had stayed back in Washington to get the deal done even as his family left for Hawai for the annual vacation last Friday applauded the news saying, “This is the right thing to do to strengthen our families, grow our economy and create new jobs.”
“This is real money that will make a difference in people’s lives,” added a triumphant Obama, noting it was the disgust of ordinary people at congressional gridlock that helped break the logjam.
“Today’s victory is yours,” said Obama, who has pushed hard for extending the payroll tax cut as part of his jobs package, in a tweet to followers Thursday night. “Keep making your voices heard-it makes all the difference.”
While the two-month extension was shorter than desired, Obama urged congressional leaders to follow through on their stated intention to negotiate a one-year extension that both parties have said they favour. But they differ on how to pay for the expected $200 billion cost of a longer term extension.
Boehner informed House Republicans in a conference call Thursday evening of the terms of the agreement. He did not take questions from lawmakers on the call.
House Republicans will now approve the Senate’s short-term extension that they had rejected on Tuesday, and Reid, will appoint lawmakers to work on a one-year extension.
By reaching a deal, House Republicans ended an impasse that developed as rank-and-file Republicans rebuffed Boehner’s initial efforts to sell them on a Senate deal that passed with overwhelming bipartisan support Saturday.
(Arun Kumar can be contacted at [email protected])