Republicans signal willingness to compromise on payroll tax cut extension

Democrats and Republicans last fall managed to hold their nose and work together to extend unemployment benefits and a payroll tax cut for two months.

That two-month extension expires at the end of this month and hopes had dimmed for an extension. But, on Monday, House Republicans signaled they’re open to an extension — on the payroll tax cuts at least. And, unlike in the fall, they say that this time, there won’t have to be corresponding cuts in government spending to make up for the extension through the end of the year.

“House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue regarding offsets, unemployment insurance and the ‘doc fix,'” House Speaker John Boehner and Majority Leader Eric Cantor said in a statement, according to the Times.

The ‘doc fix’ is an adjustment to the Medicare rules that keeps doctors from seeing a major cut in their Medicare reimbursement rates.

Todd Zwillich, the Takeaway’s Washington correspondent, said bipartisanship has broken out in Washington — at least in terms of how to pay for the cut: don’t.

“That’s the part Republicans have relented on. Everybody pays 6.4 percent payroll tax. That money goes to finance social security. Congress and the President cut that down to 4.2 percent,” Zwillich said. “That means about $1,000 for each of us that earns a regular paycheck. There’s been a fight over whether and how to extend that cut.”

Republicans have been insisting the tax cut be paid for with cuts, but Monday night they said they’ll pass it without provisions to pay for it.

“I’d like to say that means this whole fight is over, but it doesn’t mean that unfortunately,” Zwillich said.