A GOP leadership aide confirms that a deal has been reached with Senate Dems under which Republicans will allow a vote on the Senate payroll tax cut extension bill.

Under the agreement, the Senate bill will get new language ensuring that “small businesses are protected from the costly new reporting requirements in the Senate bill,” the aide says. And Reid will appoint conferees for talks to begin on a year long extension.

This appears to be the main thing Republicans gained in exchange for agreeing to support the bill. Reid’s agreement to appoint
“conferees” isn’t materially any different from his previous willingness to negotiate a deal on the long term extension after the shorter term one passed. No fixed deadline was set for those talks to begin.

Now Boehner has to take the agreement to his caucus. While that didn’t go too well last time around, he’s allowing a vote on it, and only around two dozen Republicans have to support the extension for it to pass, presuming it will get overwhelming Dem support. The bill may pass with a huge majority of House Dems supporting it, while a minority of Republicans back it. What that means for Boehner’s speakership remains to be seen.

This is a very significant victory for Obama and Dems, and it stands as an all too rare example of what can happen when they draw hard lines and refuse to budge, secure in the knowledge that the public is on their side. That said, a few caveats are necessary. First, Dems already made significant concessions just to get to this point: They dropped the millionaire surtax (which had very broad public support) and agreed to an expedited decision on the Keystone XL pipeline (though it remains unclear what this means in practice, both substantively and politically).

Second, this tough stand by Dems was enabled by a unique turn of events. Either through a failure of communication among GOP leaders or a bad misjudgment of sentiment in the House GOP caucus, a bizarre situation developed which gave Dems all the leverage and left the House GOP with none. This upended the dynamic we’ve seen for the last year, in which Dems had regularly been placed on the defensive and Republicans held much of the leverage, due to their apparent willingness to flirt with true disaster in order to get the concessions they were demanding. In this case, the Senate passed the extension with overwhelming bipartisan support — putting virtually every GOP Senator on record in favor of the proposal, before they went home for the holidays — even as the House GOP leadership was confronted with a rebellion in its caucus that suddenly left the House GOP isolated. This strange turn made it far easier for Obama and Dems to drive a wedge among Republicans and ensured that pressure on House Republicans would only mount from within their own party.

Third, this is the only piece of Obama’s jobs plan that Dems have been able to pressure Republicans into supporting. As a result, the basic overall dynamic may remain unchanged: A bad economy next year; Congressional gridlock; rising public disenchantment with government; and an incumbent running for reelection after failing to prevail on Congress to pass many of his major proposals to fix the economy. And forth, on the payroll tax cut itself, there’s a whole new set of talks set for January; Dems will be facing a more unified GOP and will not enjoy the leverage they did this time around. While the coming standoff will be good election year politics for Dems, they will likely have to make some concessions that will not be fun for liberals to swallow.

But still, for Dems and Obama, it’s not a bad way to end 2011. It’s a big win. And its overall storyline dovetails perfectly with the message about the GOP’s true priorities — and the Dems’ willingness to fight for the middle class against Republicans who place the interests of the wealthy first — that Dems had been hoping to take into next year.


UPDATE: John Boehner’s statement is here. Obama’s statement:

For the past several weeks, I’ve stated consistently that it was critical that Congress not go home without preventing a tax increase on 160 million working Americans. Today, I congratulate members of Congress for ending the partisan stalemate by reaching an agreement that meets that test.

Because of this agreement, every working American will keep his or her tax cut – about $1,000 for the average family. That’s about $40 in every paycheck. Vital unemployment insurance will continue for millions of Americans who are looking for work. And when Congress returns, I urge them to keep working to reach an agreement that will extend this tax cut and unemployment insurance for all of 2012 without drama or delay.

This is good news, just in time for the holidays. This is the right thing to do to strengthen our families, grow our economy, and create new jobs. This is real money that will make a real difference in people’s lives. And I want to thank every American who raised your voice to remind folks in this town what this debate was all about. It was about you. And today, your voices made all the difference.