Apparently the Republican leadership in Congress has decided they don't feel like playing chicken over the payroll tax extension again:
“Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today 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,’” said GOP leaders in an official statement Monday afternoon.
That’s a huge concession to legislative and political realities, and a tacit admission that Republican leaders desparately want to avoid another no-win fight over renewing a tax cut that overwhelmingly benefits the middle class.
The smartest option for the payroll tax extension has always been to simply not pay for it. What's more, that's always been how Republicans have dealt with other tax cuts. They certainly didn't demand offsets in 2001 or 2002 or 2003 or any of the other years they passed tax cuts when they were in power. It's only Democratic tax cuts they want to pay for.
But now they're learning the same lesson that Democrats learned during the Bush era: opposing tax cuts is just bad politics, full stop. The reason doesn't really matter. We liberals who thought the era of the tax revolt was finally over a few years ago were wrong: it's still rolling along as strong as ever. Maybe it will ease up when the economy is in better shape, but that's still a few years away.
Politically, the only interesting question left is whether John Boehner can get his troops to back him up on this. I think he probably can. Elections are coming up, members got an earful from their constituents during the winter break, and hey — it's a tax cut. Making life hard for Obama is, perhaps, Job 1 right now, but tax cuts are a close second and Democrats are refusing to budge this time. It's a cave-in, but it's a pretty small one. I suspect they'll go for it.