Did the GOP really cave on Obama's payroll tax holiday?

Republicans puzzle much of D.C. by suddenly backing off a demand to slash spending in exchange for extending a tax holiday. Is there more here than meets the eye?

President Obama shakes hands
(Image credit: Alex Wong/Getty Images)

Washington is on the cusp of something unusual: A bipartisan agreement hammered out well before the 11th hour. On Tuesday evening, House and Senate leaders agreed to a package that will renew President Obama's payroll tax holiday for the rest of the year, as well as raise Medicare reimbursement rates for doctors and extend unemployment benefits for another 10 months. The biggest surprise: House Republicans dropped their insistence that the payroll-tax-cut extension (which will add $100 billion to the deficit) be paid for with cuts elsewhere, a capitulation that infuriated many conservatives. Did the GOP simply give up after badly losing a similar fight in December, or is something else going on?

The GOP caved, big time: Both sides compromised to reach this deal, but Republicans "surrendered," says Steve Benen at The Maddow Blog. Facing the prospect of being blamed for raising taxes on 160 million middle-class workers, "the GOP simply couldn't play the same game" at which it excelled during debt-ceiling and government-shutdown showdowns last year: Hold the economy hostage, wait for Democrats to cave. This time, Democrats had the upper hand and everyone knew it.

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