Political India: Engaging America

John Boehner, Speaker of the U.S. House of Representatives, agreed to extend the Democrat-supported payroll tax cut and unemployment benefits for two months into the New Year, thereby forestalling a tax rise of $40 per week for an average middle class family and handing President Barack Obama an important election-year victory.

After weeks of intensifying pressure over a deal that had hit a stalemate in Congress, Mr. Boehner's about-turn came after his Republican colleagues in the Senate threw their weight behind the White House plan. Once passed into law the bill is likely to impact the welfare of 160 million working families and several million unemployed persons.

Announcing his decision, said to be unpopular with a significant number of rank-and-file House Republicans, Mr. Boehner said in a news conference on Thursday, “Sometimes it's hard to do the right thing and sometimes it's politically difficult to do the right thing. But when everybody called for a one-year extension of the payroll tax deduction, when everybody wanted a full year of extended unemployment benefits, we were here fighting for the right things.”

While admitting that his opposition to the bill, branded as obstructionism by Mr. Obama, “may not have been the politically smartest thing in the world,” Mr. Boehner however warned of the consequences of failing to extend the tax cut beyond the two-month mark.

“When you look at this, it is just another short-term extension,” he said, adding, “Kicking the can down the road for a couple of months does cause problems. Mr. Boehner also sought to link Republicans' cooperation with Democrats on the bill to Republican support for the Keystone Pipeline .

Unsurprisingly Mr. Obama greeted the news with an upbeat response, saying, “Today, I congratulate members of Congress for ending the partisan stalemate by reaching an agreement that meets that test.”

Emphasising that the average American family earning about $50,000 per year would receive around $1,000 extra, he drew attention to the need to cobble together a year-long extension of the scheme as well. “When Congress returns, I urge them to keep working to reach an agreement that will extend this tax cut and unemployment insurance for all of 2012 without drama or delay,” he said.

Earlier in the day Mr. Obama had resorted to a dramatic move of appearing before media alongside a group of citizens who had written to him about the difficulties they had faced owing to the imminent expiration of the cut and the aid. Mr. Obama cited examples of a man in New York who had to forgo the occasional pizza night with his daughters and the situation of another man who said that having an extra $40 in his cheque would buy enough heating oil to keep his family warm for three nights.