GOP Leader Announces Deal on Payroll Tax Cut

House Speaker John Boehner announced an agreement with the Senate on a two-month payroll tax cut. President Barack Obama congratulated Congress for ending the "partisan stalemate," over extending the tax cut.

Boehner said he has reached agreement with the Senate to renew the measure before it expires on December 31. In a statement, the GOP House leader said that he expects to pass a new bill by Christmas that would renew the tax break for two months while congressional negotiators work out a longer-term measure.

It was a compromise that was suggested by Senate Republican Leader Mitch McConnell earlier in the day.

The agreement would assure that 160 million workers aren't hit by a 2 percentage point increase in the payroll at the start of the new year.

The House and Senate plan to act on the two-month extension Friday.

The about-face by House leadership comes after it received much pressure from all fronts, and attempted to force a deal that, Boehner acknowledged, "may not have been politically the smartest thing in the world."

The Senate's top Republican on Thursday urged the House to pass a short-term renewal of payroll tax cuts and break an impasse that threatens all workers with a tax increase on January 1, 2012. President Obama also piled on the pressure Thursday afternoon.

"This is an issue where an overwhelming number of people of both parties agree. How can we not get that done?" Obama said in an appearance in which he was flanked by several people who tweeted the White House about how they would be adversely impacted if the tax cuts were not extended. "Has this place become so dysfunctional that even when we agree to things we can't do it?" Obama asked, rhetorically. "It doesn't make any sense. Enough is enough."

McConnell of Kentucky urged House Republicans to pass the two month extension while calling on Senate Majority Leader Harry Reid, D-Nev., to appoint negotiators on the separate House measure that would bring a year-long renewal of the payroll tax and jobless benefits.

Within hours, a House Republican freshman broke ranks and agreed, signaling that fierce pressure that was coming from almost every corner of the Republican Party.

"This isn't about proving a point," said Rep. Sean Duffy, R-Wis. "Middle class families deserve a Congress that will rise above the squabbling and ensure their taxes don't go up right after Christmas."

He called on his own Republican leaders to take up a two-month extension of the cuts, days after the House rejected such a plan passed by the Senate and held out instead for a one-year renewal.

The statement suggested that GOP Leader Mitch McConnell's plan may have started to break down a deadlock between House Republicans and Democrats controlling the Senate that had split House and Senate Republicans, too.

With the Associated Press