Republicans caved under pressure. Evening though a two month extension won't solve things in the long term, it will help temporarily give the 2 million people out of work some reprieve and spare doctors from a big Medicare cut. This will save each tax payer $40 per paycheck. This is called deferring the battle for another day. In other words, Congress is being stupid. A two-month extension only perpetuates the uncertainty that too many employers already have in dealing with the economy and what's coming out of Washington. Prolonging the agony will not suffice the American people.
(CNBC) House Republican leaders abruptly caved and agreed to demands by President Barack Obama, congressional Democrats and fellow Republicans for a two-month extension of tax cuts for all workers.
The agreement, struck after some of the staunchest House conservatives began to retreat, also would renew jobless benefits for almost two million people and spare doctors from a big cut in Medicare payments.
The decision came after an intense day of maneuvering in which the Senate's top Republican leader, Kentuckian Mitch McConnell, urged the House to accept the Senate's short-term fix and negotiations later on a year-long extension. Obama, too, chided Republicans for blocking something all parties agreed upon.
Then a pair of GOP freshmen — the group most opposed to a short-term agreement — pivoted and urged a quick resolution before the tax cut expires Dec. 31. Absent a quick agreement, workers faced an increase of two percentage points in their Social Security taxes, or $1,000 a year for someone earning $50,000.