Democrats Break Through Gridlock with Payroll Tax Cut Agreement

Republicans backed down on payroll tax holiday.

By + More

President Obama seems poised for an important victory on extending the payroll tax holiday--an issue over which he has dueled with congressional Republicans for many weeks.

Congressional leaders reached a tentative deal Tuesday to extend the payroll tax cut until the end of the year. This move would affect 160 million Americans.

The deal also would extend unemployment benefits for 10 months and delay rate cuts for doctors who treat Medicare patients.

[Obama Takes Message to Local TV in Swing States.]

President Obama called the tax-cut compromise "good news" but he added: "You can't take anything for granted here in Washington until my signature is actually on it....Let's keep making sure the American people's voices are breaking through until it's finally, absolutely done."

Republicans say they won a victory by insisting on $50 billion in offsetting budget cuts in exchange for the unemployment and Medicare changes. But Democrats and the administration forced the GOP legislators to back down from their previous insistence that the payroll tax cuts also be offset with spending cuts elsewhere. Under the tentative agreement, these tax cuts will add to the deficit.

Obama and the Democrats had blamed the GOP for blocking an agreement on the payroll tax-cut extension, and Democratic strategists say polls indicate that their arguments were making headway. The latest CNN-ORC International poll finds that 54 percent of Americans support the payroll tax cut extension and 42 percent oppose it.

  • U.S. News Debate Club: Should the payroll tax cuts be extended?
  • Santorum's 2006 Loss Becoming Target of Attack Ads.
  • Momentum Back on Mitt Romney's Side with Maine Victory.