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Republicans 'agree' to tax vote US Republicans agree to payroll tax deal
(40 minutes later)
US House of Representatives Speaker John Boehner has agreed to a vote on a bipartisan deal to extend a payroll tax cut, US media reports. US House of Representatives Speaker John Boehner has agreed to a vote on a bipartisan deal to extend a payroll tax cut.
House Republicans had refused to vote on the bill, passed by Republicans and Democrats in the Senate last Saturday.House Republicans had refused to vote on the bill, passed by Republicans and Democrats in the Senate last Saturday.
Its passage would end a bitter standoff between the President Barack Obama and Republicans. Its passage would end a bitter standoff between President Barack Obama and Republicans.
The tax break was due to expire on 31 December, hitting the wage packets of some 160 million American workers.The tax break was due to expire on 31 December, hitting the wage packets of some 160 million American workers.
The compromise deal would see the House consider a new bill containing a face-saving provision on making the package more friendly to small businesses. The compromise would see the House consider a new bill with a face-saving provision on making the package more friendly to small businesses.
President Barack Obama and his Democratic allies have kept up relentless pressure on the House Republicans in recent days to back a Senate deal that would extend the payroll tax for two months. And Senate Democrats would agree to appoint negotiators to work out a year-long deal.
Because of the amendment, the new bill would require Senate and House approval.
Republican rift
House Republican leaders are to hold a conference call at 17:00 EST (22:00 GMT) to update rank-and-file members on the development.
President Barack Obama and his Democratic allies have kept up relentless pressure on the House Republicans over the issue.
The Senate bill would extend the payroll tax and federal unemployment benefits for two months.
Unlike other budget stand-offs this year, this dispute has exposed Republican divisions.Unlike other budget stand-offs this year, this dispute has exposed Republican divisions.
Earlier on Thursday, Senate Republican Minority Leader Mitch McConnell broke his silence to urge his colleagues in the House to pass the measure.Earlier on Thursday, Senate Republican Minority Leader Mitch McConnell broke his silence to urge his colleagues in the House to pass the measure.
Conservative Republicans were initially sceptical about extending the payroll tax break, which economists have said would aid US economic recovery. Two freshman House Republican lawmakers also released statements on Thursday calling for a vote, breaking the unified front shown by members of that chamber in a news conference on Tuesday.
But as Democrats accused them of supporting tax cuts only for the wealthiest Americans, correspondents say Republicans could not be seen to preside over an effective tax rise for middle-class Americans with a general election year looming. Conservative Republicans were initially sceptical about extending the payroll tax break.
Economists said the measure would aid US economic recovery, but Congress disagreed over how to offset the $120bn (£76bn) cost of the plan.
Democrats accused them of supporting tax cuts only for the wealthiest Americans.
Correspondents say Republicans could have faced blame for an effective tax rise for middle-class Americans, with a general election year looming.