WASHINGTON, Dec 23, (AFP): Republican leaders bowed to intense pressure Friday and voted to extend a payroll tax holiday for 160 million Americans, handing victory to President Barack Obama after a tense showdown.
The deal, which finally sailed unopposed through Senate and the House of Representatives two days before Christmas, allows Obama to end the year on a triumphant note after being thwarted by Republicans for months.
With the nation hurtling into the 2012 election year when he will seek a second White House term, House Republicans agreed to back a two-month extension of a two percent payroll tax cut, just days after blocking the measure that emerged as a compromise from the Senate.
Their tactics had sparked a torrent of derision from the media, some conservative luminaries and Democrats who eagerly seized a chance to pose as the party of lower taxes, a mantle that Republicans usually claim.

Democratic Senate Majority Leader Harry Reid had sharp words for new conservative lawmakers, saying he hoped they had had “a very good learning experience.” “People wonder why the approval rating for Congress is so low. I don’t wonder. Everything has been a knockdown, dragout fight. There is no reason to do that,” Reid said.
The bill now has to be signed by Obama, before finally flying off to Hawaii for his Christmas vacation, the White House said.
In a publicity coup in the high-stakes countdown to the November elections, Obama had delayed joining his wife and daughters on the islands where he grew up in order to see the legislation through.
US media rounded on Republicans for what the Politico news website called their “unruly” behavior.

Standoff
In an article headlined “The humbling of the House GOP,” Politico said the standoff had “exposed both the political naivete of the freshman-heavy Republican conference and the sharp limits” of Speaker John Boehner’s power.
It “may not have been politically the smartest thing in the world,” Boehner admitted Thursday of the Republican gambit to hold out for a year-long extension, partly powered by Tea Party conservatives.
Angered by the delay, Obama had enlisted the help of supporters on Twitter and the Internet to argue that many Americans would be badly hurt by losing $40 from their paycheck every two weeks if the tax holiday expired on January 1.
“I want to thank every American who raised your voice to remind folks in this town what this debate was all about,” Obama said Thursday.
“It was about you. And today, your voices made all the difference.”
In a deal hammered out at the weekend, the Senate had already agreed to a temporary two-month measure, but House Republicans tried to hold out for a full one-year extension.
The new compromise will also see Reid appoint negotiators to work on a one-year extension, and included face-saving language easing the burden of the tax cut on small businesses, which Republicans were able to argue was included only as a result of their holdout.
The deal means the payroll tax deduction, which is separate from income taxes and funds the US retirement system, will remain at 4.2 percent instead of rising to 6.2 percent on Jan 1.
Two million Americans will also keep unemployment benefits that were due to expire at the end of the year.

After days of wrangling, Republican Senate Minority Leader Mitch McConnell, one of the sharpest Washington operators, weighed in on Thursday, sketching the eventual compromise in an intervention that may have been decisive.
Obama will savor a victory after a stalemate that has seemed to boost his standing, with his approval ratings approaching the crucial 50 percent mark, 11 months before he asks voters for a second term.
But Obama did not have things all his own way.
The deal preserves language in the payroll tax bill requiring the president to take another look at a controversial US-Canada oil pipeline project he had hoped to defer until after his reelection bid.
The plan to build an extension to the Keystone XL pipeline has split environmentalists, union workers and business groups in the Democratic base vote, and looms as a high stakes decision for Obama.