House Republicans Concede on Payroll Tax

NEW YORK (TheStreet) -- Americans could expect to have their pockets lined with an extra $40 from every paycheck in 2012.

House Republicans offered a significant concession -- no spending cuts -- on the payroll tax holiday that could be the necessary step to ensuring an extension of the measure through the end of the year.

House Speaker John Boehner

"Unfortunately, to date, Democrats have refused virtually every spending cut proposed -- insisting instead on job-threatening tax hikes on small business job creators -- and with respect to the need for an extension of the payroll tax cut, time is running short," House Speaker John Boehner, House Majority Leader Eric Cantor and House Majority Whip Kevin McCarthy said in a joint statement.

Boehner and Senate Majority Leader Harry Reid agreed in December to temporarily extend the payroll tax cut for two months, but it came at the political cost of an internally bitter battle among House Republicans who rejected an overwhelmingly bipartisan bill passed by the Senate.

Some House GOP members said a temporary extension was bad practice and demanded a permanent change, but President Obama's "#40dollars" campaign sought to destroy Congressional deadlock as it crashed social media Web sites Twitter, Facebook and YouTube and asked citizens to tell their stories about what an extra $40 per paycheck meant to them.

Boehner, who had backed down from an initial bipartisan plan at the behest of his party, caved under pressure of the potential political fallout that could have occurred if a failed payroll tax holiday left an estimated 160 million Americans $40 short every paycheck.

"Sometimes it's politically difficult to do the right thing," Boehner said in December when asked if he thought he had caved on the agreement.

The decision to extend the two-percentage-point cut in payroll taxes through the year could add some $100 billion to the nation's $15.1 trillion debt.

GOP presidential hopefuls haven't commented on recent developments in the payroll scuffle, but they were highly vocal in December and used the opportunity to knock Senate Democrats and the president.

"The Senate passes what it wants and it leaves town -- doesn't wait around, it doesn't act responsibly," Newt Gingrich said then. "I just think if you're a normal American, you're looking at this stuff, you just say, 'What a total failure of leadership.'"

"I would have met with the leaders; I would have brought them to the White House ... and if they didn't want to come to the White House, I would have gone to their offices," Mitt Romney said before the temporary extension passed Congress.

-- Written by Joe Deaux in New York.

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