Behind the GOP's Payroll Tax Surrender

Republicans now must lick their gaping, self-inflicted political wounds and plan for the coming debate over how to pay for the remaining 10-months of a payroll-tax extension



There was no formal cease-fire.

Speaker John Boehner didn't even call Senate Majority Leader Harry Reid to offer up his payroll-tax sword of surrender.

The great Christmas conflict over tax cuts ended at the staff level. Boehner's chief of staff, Barry Jackson, cut the deal with Reid's chief of staff, David Krone. If the weeklong tussle over a two-month or one-year extension of payroll taxes was over principle, the principal antagonist, Boehner, in the end, had neither the will nor the stomach to directly sue for peace.

Preordained since at least Tuesday, the only variable on the eventual House GOP retreat was timing. When. Not if. Republicans within leadership circles and those who used to be but now prowl K Street could smell defeat almost from the start. It reeked like reindeer road kill. House Republicans tried for two days to shift public opinion but were met by the Obama megaphone, which grew louder and more visually emphatic by the day.

The mechanics of the endgame commenced, in fact, right after President Obama stood with dozens of middle-class Americans who stood to lose -- on average -- $83 a month if the 2 percent payroll-tax cut expired on Jan. 1. Mere hours after a press event where they looked implacable and entrenched, Boehner and House Majority Leader Eric Cantor met with the eight Republicans appointed to a nonexistent conference committee on the payroll-tax issue. They swiftly told Boehner to seek a deal with Reid.

House Ways and Means Committee Chairman Dave Camp, R-Mich., then called Sen. Max Baucus, D-Mont., chairman of the tax-writing Finance Committee, to negotiate new language to smooth out implementation of the two-month payroll-tax-cut extension. The language was not controversial. Senate Democratic aides said if the issue had been raised by Senate Republicans, it would have been addressed when the bill was first drafted.

At roughly 2 p.m., Boehner set up a conference call with his leadership team and told them he would accept Reid's demand for a two-month deal, with the new payroll-tax language. They agreed without complaint.

Jackson then called Krone, who readily accepted the contours of the GOP retreat. Krone checked with the Baucus staff and ran the deal past Reid. The majority leader accepted without hesitation, as his aides celebrated what they described as a "total cave." Krone called Jackson back, and it was over.

Interestingly, it was the first time Jackson and Krone -- who negotiated their way around near-miss government shutdowns and debt defaults -- had spoken since Saturday. Previously, Jackson and Krone had inched their way through tough negotiations. This time, the retreat went from zero to 60 mph.

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Major Garrett is a congressional correspondent for National Journal.

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