The White House this evening agreed to a two-month extension of the payroll tax cut, bowing to Republican demands that it include a provision forcing a faster decision on the whether to allow the Keystone pipeline to extend from Canada deep into the United States.
Obama and his Democratic allies had already given in on GOP demands that the extension be paid for with a new tax on upper income earners. In addition, the White House had also abandoned its effort to link the payroll tax to passage of a budget as a lever to try to keep Congress in town long enough to approve the payroll tax measure.
But with the limited extension, Obama salvages something of a political victory because he will soon be able to return to his campaign to seize the tax cutting high ground from Republicans. As negotiations for a further extension heat up again by January, Obama is sure to revive accusations that Republicans don’t want to support tax cuts for average workers.