House Speaker John Boehner made it official moments ago in a written statement. After blowing up an agreement to prevent this year's payroll tax cut from lapsing on January 1, House Republicans will adopt legislation nearly identical to the stopgap bill the Senate passed on an overwhelmingly bipartisan basis this past Saturday.
"Senator Reid and I have reached an agreement that will ensure taxes do not increase for working families on January 1 while ensuring that a complex new reporting burden is not unintentionally imposed on small business job creators," Boehner says. "Under the terms of our agreement, a new bill will be approved by the House that reflects the bipartisan agreement in the Senate along with new language that allows job creators to process and withhold payroll taxation under the same accounting structure that is currently in place. The Senate will join the House in immediately appointing conferees, with instructions to reach agreement in the weeks ahead on a full-year payroll tax extension. We will ask the House and Senate to approve this agreement by unanimous consent before Christmas. I thank our Members - particularly those who have remained here in the Capitol with the holidays approaching - for their efforts to enact a full-year extension of the payroll tax cut for working families."
The Senate's payroll bill included a provision to prorate the payroll tax cap. Payroll taxes only apply to the first $110,000 of income, after which the rate falls to zero. To adjust for that, the Senate bill created a new cap at just over $18,000, to reflect the two month-length of the payroll cut. The technical correction in the new bill will leave the existing $110,000 cap in place.
Boehner will discuss the deal in a 5:30 Capitol press conference.