House of Representatives Speaker John Boehner on Thursday caved in to a growing chorus of criticism from both within and outside his Republican party and agreed to a short-term deal to extend a payroll tax cut for 160 million Americans.
In a major reversal that appeared to end a standoff with Democrats, Boehner told Senate Majority Leader Harry Reid he would set a vote in the House on a Senate-passed two-month extension of the payroll tax cut.
The Republicans' about-face contrasts with a year of dominance in Congress, in which their staunch opposition to higher taxes and spending has yielded a string of political successes. Their backpedalling this time handed a rare victory to President Barack Obama and Democrats.
"We have fought the good fight. Why not do the right thing for the American people even though it's not exactly what we want," Boehner told a news conference.
Republican leaders feared fierce backlash from voters in the 2012 elections and many Republican lawmakers were already getting an earful from constituents back home. Had the deal failed to materialize, they were looking at an effective $1,000-a-year tax increase on the average worker starting on January 1.
"If they had continued to dig in on this they risked losing the Senate in 2012 and handing President Obama the election without even having a fight," said Ford O'Connell, a Republican strategist.
That said, Republicans will be back at the negotiating table in the first two months of the year - in the middle of the Republican primaries for 2012.