If the payroll tax deal holds on Capitol Hill, it’s a win for President Obama…and the middle class.
“This tax cut means that the typical American family will see an extra $40 in every paycheck this year. It will help speed up this recovery. It will make a real difference in the lives of millions of people,” President Obama said Wednesday.
Republican leaders tried to spin the deal as their win.
“We were not going to allow the Democrats to continue to play political games and raise taxes on working Americans,” said House Speaker John Boehner.
The president, in Wisconsin Wednesday, was celebrating more good economic news, a bump in U.S. manufacturing.
His popularity is rising as well.
That forced GOP lawmakers to back down and make the tax deal.
“Republicans saw that in December when they held out for spending cuts, resisted that payroll tax extension, they were pounded for blocking a tax cut for every American,” explains CNBC’s John Harwood.
The tentative deal would keep payroll tax rates at 4.2% for all of 2012, with no spending cuts like Republicans demanded and no tax hike on rich that Democrats demanded, so it adds $100 billion to deficit.
On the linked issue of extended jobless benefits, unemployment gets cut from 93 weeks to 73 weeks in hard hit states, 63 weeks in the rest.
Senators who’ve worked for months without a bipartisan deal on anything major are relieved.
“Congress is not enjoying such a great reputation, and here’s an opportunity to reach an agreement to show we can get our work done,” said Montana Democrat Max Baucus.
President Obama says he’ll sign the payroll tax cut extension as soon as it passes.
Republican leaders hope it’ll be this week, but Tea Party members who came to Washington to cut spending and the deficit complain this deal does neither.
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