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US Republicans agree to payroll tax deal 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, in an abrupt climbdown.US House of Representatives Speaker John Boehner has agreed to a vote on a bipartisan deal to extend a payroll tax cut, in an abrupt climbdown.
He had refused to accept the bill, passed by Republicans and Democrats in the Senate last Saturday. He had refused to accept the bill, which was passed by Republicans and Democrats in the Senate last Saturday.
Correspondents say a deal would signify a cave-in by House Republicans, and victory for President Barack Obama. Correspondents say the deal amounts to a cave-in by House Republicans, and victory for President Barack Obama.
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 pay slips of some 160 million American workers.
Under the compromise, the House is expected to consider a new bill with a face-saving provision on making the package more friendly to small businesses. Under the compromise, House Republicans have a face-saving provision on making the package more friendly to small businesses.
And Senate Democrats would agree to appoint negotiators to work out a year-long deal. And Senate Democrats will appoint negotiators to work out a year-long deal.
The new bill would require Senate and House approval, with a vote possible as early as Friday. The new deal will require Senate and House approval.
Republican riftRepublican rift
Mr Boehner confirmed a deal had been reached in a news conference on Thursday, after briefing rank-and-file members of his party. After briefing rank-and-file members of his party, Mr Boehner said in a news conference that the House would vote before Christmas.
President Obama and his Democratic allies have kept up relentless pressure on the House Republicans over the issue.President 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.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 House colleagues to pass the measure.Earlier on Thursday, Senate Republican Minority Leader Mitch McConnell broke his silence to urge his House colleagues to pass the measure.
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.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.
Conservative Republicans were initially sceptical about extending the payroll tax break, which economists say would aid US economic recovery.Conservative Republicans were initially sceptical about extending the payroll tax break, which economists say would aid US economic recovery.
As Republican leaders demurred over how to offset the $120bn (£76bn) cost of the plan, Democrats accused them of backing tax cuts only for the wealthiest Americans.As Republican leaders demurred over how to offset the $120bn (£76bn) cost of the plan, Democrats accused them of backing tax cuts only for the wealthiest Americans.
Correspondents say Mr Boehner's about-turn reflects a realisation by the Republican party that it would have faced blame for an effective tax rise on middle-class Americans - with a general election year looming.Correspondents say Mr Boehner's about-turn reflects a realisation by the Republican party that it would have faced blame for an effective tax rise on middle-class Americans - with a general election year looming.
Mr Obama also increased pressure on House Republicans in a news conference on Thursday, accusing the deal's opponents of not appreciating the tax credit's value to American workers. President Obama said in a written statement: "This is good news, just in time for the holidays. This is the right thing to do to strengthen our families, grow our economy and create new jobs."
Surrounded by a group of supporters, the president read out messages from voters who said the measure would help them pay their heating bills, visit elderly relatives and treat their families to pizza dinners. Earlier in the day, he said in a news conference that the deal's opponents did not appreciate how much the measure would help American workers.
"This is exactly why people get so frustrated with Washington," Mr Obama said. The president read out messages from voters who said the package would help them pay their heating bills, visit elderly relatives and treat their families to pizza dinners.
In a previous statement, Mr Obama blamed the lack of progress on a Republican "faction".