Personally, I thought the payroll tax cut was a bad idea to start with. It was an administration dodge to avoid the fight for allowing the Bush tax cuts for the wealthy to expire, which would have been the right thing to do.
These "temporary" tax cuts have a way of becoming permanent or at least highly politicized. Allowing the payroll tax cut to expire is now viewed as a tax increase. The longer it stays in place the longer the enemies of Social Security are able to rail about the program's insolvency. (Yeah, I know they will do that anyway, but defunding the program this way lends opponents credibility.)
But this proposed compromise is a troubling thing in itself. If it looks as if the Democrats have "won" because the Republicans have dropped their demand that the tax break be offset with spending cuts, a closer look at the ramifications needs to taken into consideration. The Democrats have caved to Republican demands that long-term unemployment benefits be cut.
Under terms of the compromise the states that have been hardest hit by weak job market would see benefits drop to 73 weeks, down from 99. Those states with better unemployment figures would get a maximum of 63 weeks of unemployment.
There are still nearly 13 million Americans unemployed and our representatives from both parties are agreed on cutting unemployment benefits. But don't let those Bush tax cuts for the wealthy expire!
By the way, those Bush tax cuts for the wealthiest five percent of Americans take the staggering amount of 11.6 million dollars from the Treasury every day according to the National Priorities Project. Ouch!